Giving reasons state the following statements whether true or false:-
(i) When there are diminishing returns to a factor total product always decreases
(ii) Total product will increase only when marginal product increases
(iii) Increase in total product always indicate that there are increasing reaturns to a factor
(iv) When there are diminishing returns to a factor, both always falls.
i. False as during diminishing returns to a factor, the TP increases but at a decreasing rate and attains its maximum.
ii. False. Total product will also increase when marginal product decreases.
iii. False. It is not necessary that increase in total product always indicate that there are increasing returns to a factor as in the stage of dimnishing returns to factor total product also increases but at dimnishing rate.
iv. False. When there are diminishing returns to a factor, total product increases and marginal product falls.
ii. False. Total product will also increase when marginal product decreases.
iii. False. It is not necessary that increase in total product always indicate that there are increasing returns to a factor as in the stage of dimnishing returns to factor total product also increases but at dimnishing rate.
iv. False. When there are diminishing returns to a factor, total product increases and marginal product falls.