Cut of 1st,2nd and 3rd phases, which phase of production will the producer stop at ? Or Till which point should a producer keep increasing the variable factor to get maximum profit ?

Cut of 1st,2nd and 3rd phases, which phase of production will the prod

1.	Cut of 1st,2nd and 3rd phases, which phase of production will the producer stop at ? Or Till which point should a producer keep increasing the variable factor to get maximum profit ?
Answer» Answer :The producer will not stop in phase I, as by employing an additional unit of variable FACTOR marginal product increases, so he will continue to produce as there is SCOPE for additional profits. The producer will not enter phase III of production as by employing an additional unit of variable factor, TP decreases and MP is negative implying LOSSES. THUS, the producer will stop in phase II as producer will find his equilibrium when TP is maximum and constant and MP becomes zero. Though MP falls but still positive addition is made to TP and the producer is ABLE to obtain a bigger TP compared to TP in the first phase.