What is return to factor? Explain …
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Gaurav Seth 7 years ago
Returns to a factor It refers to the behaviour of output when only one variable factor of production is increased in short-run and fixed factors remain constant.
Law of diminishing returns to a factor It refers to a situation in which total output increases at a diminishing rate when more and more variable factor is combined with the fixed factor of production. In this situation, Marginal Product of the variable factor must be diminishing.
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