The Law of Variable proportion.

                       If   one  input is variable  and  all other  inputs are fixed , the  firm’s  production  function exhibits the law of  variable  proportion. If the number  of units  of a variable  inputs is  increased  , keeping  other  inputs  constant , how  output  change  is  the  concern  of this  law . Suppose  land , plant and equipment are  the  fixed  factors , and  labor,  the  variable  factor.When  the  number  of labors is  increased  successively  , to have  larger  output  the  proportion  between  fixed  and  variable  factors is  altered  and the  law of  variable  proportions sets in .  The  law  states   that  , as  the  quantity  of a  variable  inputs is  increased  by  equal  does  keeping  the  quantities  of  other  inputs  constant,  total product  will increase , but  after  a point at a diminishing  rate .  The  law  of  variable  proportions [ or  the  law  of  non proportional returns] is  also  known  as  the  law  of  diminishing  returns  .  But  the  law  of  diminishing  returns  is  only one  phase  of  the  move comprehensive  law  of  variable  proportions . —-#—-END.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.