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Answer the Following Question: What is Meant by Increasing Returns to a Variable Factor? - Economics

Short Note

Answer the following question:
What is meant by increasing returns to a variable factor?

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Solution

During this phase of increasing returns to a factor, TP increases at an increasing rate and is also accompanied by a rising MP curve. The MP curve attains its maximum point corresponding to the point of inflexion of the TP curve. Throughout this stage, AP also continues to rise.

Concept: Returns to a Factor
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