ECONOMICS LAW OF VARIABLE PROPOTION
Define Laws of Variable Proporation? What is the Assumption of
the Law
The law of variable proportions is a short-run production function. Where some factors are
fixed and other variable, like land may be fixed and labour may be variable. Variable means its
quantity can be changed.
Statement of the Law
As equal increment of one point are added, the inputs of other productive services being held,
constant, beyond a certain point the resulting increment of products will decrease i.e.. The
marginal product will diminish.
The law of variable proportion is also know as the law of diminishing returns this law refers to
the amount of extra output secured by adding to a fixed input more and more of variable inputs.
If, for example we add increasing quantities of some variable factors (say labour) to a fixed
factor (say land) and as ea result we get production more than proportionately, then it is known
as increasing return to scale. When, however, the resulting production is in the same proportion
it is known as constant returns and when he output is less than input it is the decreasing returns
of scale.
Assumption of the Law
There Is Only One Variable Factor. All The Other Are Constant.
The Units Of Variable Factors Are Homogenous In Character.
It Is Possible To Change The Proporation In Which The Various Factors Are Combined
Together.
The State Of Technology Remains Unchanged.
The Time Period Is Short
