Consider the following Table which gives figures relating to the output of a commodity. The inputs used include, Land (which is fixed) and Labour (which is a variable factor).

Based on the above table, attempt the following:

(i) Mark the three stages of law of variable proportion in the above table.

(ii) In which stage will a rational producer choose to operate? Give reason.

(b)What are the reasons behind varying returns viz., increasing, constant and decreasing returns to a factor in production in the short-run? Will such varying returns to a factor hold in the longrun?

(i) Stages of the Law of Variable Proportions:

   - Stage I: This stage is characterized by increasing returns to the variable factor. In the table, moving from 1 to 2 laborers, the total product increases from 12 to 16, indicating increasing productivity.
  
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