Saved Bookmarks
| 1. |
State different phases of the Law of Variable Proportions on the basis of total product. |
|||||||||||||||||||||
|
Answer» According to Law of Variable Proportions, given an increase in one factor of production, other factors remaining unchanged, total production increases at an increasing rate, then at diminishing rate and finally at negative rate. Thus, there are three stages of the law : (i) Stage I – where total product increases at a higher rate. (ii) Stage II – where total product increases but at a diminishing rate. (iii) Stage III – where the total product diminishes. Following production schedule demonstrates the Law of Variable Proportions:
|
||||||||||||||||||||||