Stage of Operation:
An important question is in which stage a rational producer will seek to produce. A rational producer will never produce in stage 3 where marginal product of the variable factor is negative. This being so, a producer can always increase his output by reducing the amount of variable factor. Even if the variable factor is free of cost, a rational producer stops before the beginning of the third stage.
A rational producer will also not produce in stage 1 as he will not be making the best use of the fixed factors and he will not be utilising fully the opportunities of increasing production by increasing the quantity of the variable factor whose average product continues to rise throughout stage 1. Even if the fixed factor is free of cost in this stage, a rational entrepreneur will continue adding more variable factors.
A rational producer will always produce in stage 2 where both the marginal product and average product of the variable factors are diminishing. At which particular point in this stage, the producer will decide to produce depends upon the prices of factors. The optimum level of employment of the variable factor (here labour) will be determined by applying the principle of marginalism in such a way that the marginal revenue product of labour is equal to the marginal wages. (The principle of marginalism is explained in detail in the chapter discussing equilibrium in diuerent types of markets.)
A rational producer will also not produce in stage 1 as he will not be making the best use of the fixed factors and he will not be utilising fully the opportunities of increasing production by increasing the quantity of the variable factor whose average product continues to rise throughout stage 1. Even if the fixed factor is free of cost in this stage, a rational entrepreneur will continue adding more variable factors.
A rational producer will always produce in stage 2 where both the marginal product and average product of the variable factors are diminishing. At which particular point in this stage, the producer will decide to produce depends upon the prices of factors. The optimum level of employment of the variable factor (here labour) will be determined by applying the principle of marginalism in such a way that the marginal revenue product of labour is equal to the marginal wages. (The principle of marginalism is explained in detail in the chapter discussing equilibrium in diuerent types of markets.)
Goods and Service Tax Book (Updated upto 20th January 2018)
GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final.
Also useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.!!
This book is approved by Ministry of HRD Govt.of India as Students friendly book.
Click on link given to Purchase Book- https://goo.gl/ArNFJx
Author Name- CA Harshita Raichandani and CA Dhananjay Ojha
Unique features of This GST Book.
1.80+ GST chart included for quick revision of chapter.
2.Provisions presented in this book in simple manner.
3.Bullet and Heading given for Long term memorisation.
4.Updated upto 25th GST council recommendation {18th January, 2018}.
5.70+ Value added questions given with answer.
6.16 Chapters fully Coverage given.
7.Definitions of Technical term related with GST is given at one place.
8.Most useful for CA Intermediate/IPCC, CS executive , CWA Intermediate and CA final. ALSO useful for B.Com / M.Com / MBA/ BBA/UPSC/ SSC and Various Govt Exams.
Click on below Link to purchase Student friendly GST Book.
http://www.comgurukul.com/educational-books/gst-book/
GST (Goods and Services Tax) Book -A student friendly Book. - Bharat Gurukul
GST Student friendly Book most relevant/Useful for CA Intermediate/IPCC, CS executive , CWA Inte
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