From the curve above, at what point is it advisable for the farmer to stop further addition of input?
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Correct Answer: Option C
Explanation:
Think of the curve like a hill. Point III is the very top of the hill, where the farmer is getting the maximum possible output.
According to the Law of Diminishing Returns, if the farmer keeps adding more input (like fertilizer) after Point III, the extra input actually starts to harm the process, and total output begins to drop.
So, Point III is the sweet spot. The farmer should stop there because adding anything more will just waste money and reduce the harvest.
Think of the curve like a hill. Point III is the very top of the hill, where the farmer is getting the maximum possible output.
According to the Law of Diminishing Returns, if the farmer keeps adding more input (like fertilizer) after Point III, the extra input actually starts to harm the process, and total output begins to drop.
So, Point III is the sweet spot. The farmer should stop there because adding anything more will just waste money and reduce the harvest.