Q1.Explain the law of variable propotion …

1.)Law of Variable Proportion states that by changing one input, keeping other factors constant, Total Products (TP) initially increases at an increasing rate, then at decreasing rate and then finally at negative rate. 2.) (i)When TP increases at increasing rate, Marginal Product (MP) also increases. (ii) When TP increases at decreasing rate, MP falls. (iii) When TP falls (negative returns) ,then MP becomes negative.

(1) The law of variable proportions is as follows: “If a producer increases the units of a variable factor while keeping other factors fixed, then initially the total product increases at an increasing rate, then it increases at a diminishing rate, and finally starts declining.”

(2) The law of variable proportions state that as the quantity of one factor is increased, keeping the other factors fixed, the marginal product of that factor will eventually decline. This means that up to the use of a certain amount of variable factor, marginal product of the factor may increase and after a certain stage it starts diminishing.
Assumptions of Law of Variable Proportions:
1. Constant State of Technology: First, the state of technology is assumed to be given and unchanged. If there is improvement in the technology, then the marginal product may rise instead of diminishing.
2. Fixed Amount of Other Factors: Secondly, there must be some inputs whose quantity is kept fixed. It is only in this way that we can alter the factor proportions and know its effects on output. The law does not apply if all factors are proportionately varied.