Question : The third stage of the law of variable proportion is called:
Option 1: negative return
Option 2: positive return
Option 3: constant return
Option 4: increasing return
Correct Answer: negative return
Solution : The correct answer is the negative return .
Negative returns are the third step of the law of changing proportions. This is the point at which adding more variable inputs to the fixed inputs causes the overall product to start declining. The reason for this is the ineffective use of the variable inputs. There are several reasons why there could be negative returns. The different inputs could start to compete with one another for resources, for starters. For instance, workers on a production line may begin to obstruct one another if there are too many of them.
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