In a typical short-run production function, before diminishing returns set in,
A)The slope of the total product curve is decreasing
B)The slope of the total product curve is increasing
C)The slope of the total product curve rises and then falls before diminishing returns sets in
D)The slope of the total product curve falls and then rises before diminishing returns sets in

Question

Quizplus · Accepted Answer

Before diminishing returns set in, the slope of the total product curve is increasing. This is because as more units of variable input (e.g. labor) are added to the fixed input (e.g. capital), the marginal product of the variable input increases. This leads to a steeper slope of the total product curve. Only after a certain point (when the marginal product of the variable input starts decreasing) does diminishing returns set in and the slope of the total product curve starts decreasing.

In a Typical Short-Run Production Function, Before Diminishing Returns Set