Law of Diminishing Returns is a fundamental concept in economics and is used to explain the relationship between inputs and outputs. It states that as the amount of one input is increased, while all other inputs are held constant, the marginal product of that input will eventually decrease. This happens because the additional input will become less effective in producing additional output.

During the second stage of the law of Diminishing Returns, the marginal product and total product of the input are still increasing, but at a decreasing rate. At this stage, the input is still adding value to the production process, but the additional output gained from each additional input is less than the previous one.

MP and AP are decreasing:
During the second stage, both the marginal product (MP) and the average product (AP) are decreasing. This happens because the input is becoming less effective in producing additional output. The marginal product measures the additional output gained from each additional unit of input, while the average product measures the total output produced by each unit of input. As the input becomes less effective, the additional output gained from each additional unit of input decreases, leading to a decrease in MP. Similarly, the total output produced by each unit of input also decreases, leading to a decrease in AP.

Conclusion:
In conclusion, during the second stage of the law of Diminishing Returns, the marginal product and average product of the input are decreasing. This happens because the input is becoming less effective in producing additional output. It is important for producers to understand this concept so that they can optimize their production process and avoid diminishing returns.

In second stage MP falls and AP also falls where AP is above MP