IMR - This is the stage of Constant Marginal Returns(CMR...

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With every additional application of variable inputs total output goes on increasing from 18 to 23 to 25 to 26. Marginal output continuously decreases from 7 to 5 to 2 to 1. The output increases more than proportionately for the first two variable units. This is the phase of Increasing Marginal Returns (IMR) . Then between the second and third variable units marginal addition is constant at 7 units.
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Unformatted text preview: This is the stage of Constant Marginal Returns (CMR) . From the third unit of variable input right upto the sixth unit there is a continuous fall in the marginal output produced. This is the stage of Diminishing Marginal Returns (DMR) . The three phases of productive activity together make up for the Law of Variable Returns....
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This note was uploaded on 11/26/2011 for the course ECONOMIC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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