3. Intheinitialstages,fixedfactorremainsunderutilised.
Its fuller utilisation calls for a more practical
application of the variable factor. As long as the fixed
factor remains underutilised, additional units of the
variable factor add more and more to total output, or
the marginal product of the variable factor tends to
increase.
5. Additional application of the variable factor enables
division of labour. Specialised workers may be used for
different processes of production. This increases the
efficiency of the variable factor. Accordingly, marginal
productivitytendstorise.
7. So long as the fixed factor remains underutilised, an
additional application of the variable factor improves the
degree of coordination between the fixed and variable
factors. As a result, marginal product (MP) increases and
totalproduct(TP)increasesattheincreasingrate.
