Three stages of production process in economics. Stages of Production in Economics 2023-01-06

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Greek mythology is filled with fascinating tales of gods, goddesses, and mythical creatures. One of the most well-known and intriguing stories is that of Athena and Medusa.

Athena is the goddess of wisdom, war, and crafts, and is often depicted wearing a helmet and carrying a shield and spear. She is the daughter of Zeus and Metis, and was born fully grown and armored from the head of her father. Athena is known for her intelligence, bravery, and strategic thinking, and is often depicted as a protector of the city of Athens.

Medusa, on the other hand, is a monstrous woman with snakes for hair and the ability to turn anyone who looked directly at her into stone. She is often depicted as a victim, as the story goes that she was once a beautiful woman who was punished by the goddess Athena for being raped in a temple dedicated to the goddess. In punishment, Athena transformed Medusa's hair into snakes and cursed her with the ability to turn anyone who looked at her into stone.

Despite their differences, Athena and Medusa are connected through their association with the city of Athens. Athena is revered as the protector of the city, while Medusa is said to have once lived in Athens and was worshipped as a guardian of the city's gates.

The story of Athena and Medusa is a complex one, with themes of jealousy, betrayal, and the consequences of actions. Athena's punishment of Medusa, while perhaps justified in the context of the story, also highlights the danger of using one's power to harm others. On the other hand, Medusa's story serves as a cautionary tale about the dangers of unwanted advances and the importance of consent.

Overall, the story of Athena and Medusa is a classic example of the rich mythology and storytelling of the ancient Greeks, and continues to be a source of inspiration and fascination for people today.

Three Stages of Production in Economics

three stages of production process in economics

Adding more variable entries is counterproductive; an additional source of labor will decrease global production. The length of the long run projects differs greatly because of the production efforts. The average physical product is at its maximum at point B, because it is tangent to the steepest ray from the origin. This is the case throughout stage 1 in as much as the aver­age product of labour is a measure of its efficiency. And it presupposes positive marginal product of L and K. The opposite will be true in industries where decreasing returns to scale prevail. In the short run, it is assumed that some factors such as capital or plant size remain fixed and others are variable.

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Stages Of The Production In Economics

three stages of production process in economics

A set of product curves is presented in the exhibit to the right. Isoquants for such examples are shown in Fig. Three Stages of Production in Economics. And this rule is applicable to variable resource allocation problems. For example, hiring an additional employee to produce cans will actually result in fewer cans produced overall.

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Production Process: Definition, Types & Examples

three stages of production process in economics

This hap­pens when output is 115. Hence it is true that as we add input our output will increase but at a decreasing rate and stay below the average product output. The three stages are also. Alternatively, if we were to reduce capital by one unit, output would fall by 3 units. The Total-Marginal Relationship : Fig. This may be due to factors such as facility capacity or efficiency limitations.

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Three Stages of Production

three stages of production process in economics

Recall that the isoquant shows the desired rate of factor substitution and the isocost line the actual rate of factor substitution. As an example, if one employee produces five cans by himself, two employees may produce 15 cans between the two of them. This is a crucial stage in the production process. In the first stage the marginal product is positive and enlarging, in the second stage the marginal product is also positive but is declining, and in the third stage the marginal product is negative. Thus, as per the theory of the law, it can be concluded that when other inputs are constant and one input is added to increase the output, after a certain level, the output will start falling down. This is, it is based on un­changed technology or art of production.

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Stages of Production in Economics

three stages of production process in economics

A variable input, on the other hand, is one whose level of us­age may be increased or decreased readily and con­tinuously in response to desired changes in output. The law of variable proportions is presented diagrammatically in Fig. The factor price ratio tells the producer the rate at which one input can actually be substituted for another in the market place. If output increases less than proportionally with input increase, we have decreasing returns to scale Fig. All of the stages are defined under the concept of diminishing marginal returns. ADVERTISEMENTS: By contrast, the long-run refers to the period of time or planning horizon in which all inputs are ca­pable of continuous variation.

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What are the three stages of production microeconomics?

three stages of production process in economics

The most typical situation is for a production function to have first increasing then decreasing returns to scale as shown in Fig. The primary factors at no stage form a part of output factor and they are not even transformed during any stage of production process. To achieve this equilibrium position, the consumer acts on the principle of substitution. The opposite will be true in industries where decreasing returns to scale prevail. The operation of law of diminishing returns can also be discerned.

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Stages of the Production in Economics

three stages of production process in economics

The relationship between physical outputs of a production process and physical inputs that is factors of production represents the theory of production function. Saari, 2011 Chiang, A. If w falls relative to r, the isocost line becomes flatter. Stage 3: In stage three, marginal returns start to become negative. Suppose the equilibrium condition did not hold or, specifically, that the producer was at point B in Fig. Literature review is also done on the concept that relates to optimum production process. Iso­quants I and II are only two of an infinite number of isoquants that could possibly be shown in the di­agram.

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Stages of Production in Economics

three stages of production process in economics

Clearly, a movement from A to B would result in a reduction of both L and K. In other words we can say that each additional variable input will still produce additional units but at a decreasing rate due to the law of diminishing returns. Substitutability of Inputs : An important assumption in the isoquant diagram is that the inputs can be substituted for each other. In any discussion of short run production function, capital is taken to be the fixed input. The inputs, which are added in the production function, are known as factors of production. Share this: Facebook Facebook logo Twitter Twitter logo Reddit Reddit logo LinkedIn LinkedIn logo WhatsApp WhatsApp logo In terms of economics the term production process is used to refer physical output.

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The Production Process (With Diagram)

three stages of production process in economics

The firm seeks either to minimize the cost of pro­ducing a given level of output or to maximize the output attainable with a given level of cost. It is only when the total product is zero that the average product also becomes zero. Ridge Lines and the Economic Region of Production : We have postulated convexity of isoquants. From the above table only stage 2 is rational which means relevant range for a rational firm to operate. . Similarly, the producer will be in equilibrium when the marginal productivities of the various factor units employed by him are equal to their prices. If we are interested in finding out the level of labour usage that maximizes average product, we have to take the first derivative of equation 3 , set it equal to zero, and solve as follows: Thus, the average product of labour is maxi­mum at 3.

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