What does APP and MPP indicate about returns

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A producer would not remain in Stage 1 because APP<MPP. What does APP<MPP indicate about returns?

Productivity can be enhanced by adding more units of input, so returns are increasing.

Adding additional units of input will result in decreased output because returns are negative

The producer is experiencing a "rational" stage of returns

The producer is operating at the most efficient level of returns

Reference no: EM13734476

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