Here are the answers to question 17: a) Identify the production function curves labeled A, B and C A: Increasing returns* B: Constant returns* C: Increasing, then diminishing, and eventually negative returns (or Law of Diminishing Returns*) b) What does the law derived from the production function labeled C state? The law derived from production function C is the Law of Diminishing Returns. It states that as successive units of a variable input are added to a fixed input, the total output will initially increase at an increasing rate, then at a decreasing rate, and eventually, total output may decline. c) (i) Which one of the three production functions curves is rare in Agriculture? Curve A* (ii) Give a reason for your answer in (i) above Agriculture is primarily governed by the Law of Diminishing Returns (Curve C) due to the fixed nature of land and other natural resources. It is rare to observe sustained increasing returns (Curve A) over a significant range of production because, beyond a certain point, adding more variable inputs to a fixed factor will inevitably lead to a less than proportional increase in output.