State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour.

State the behaviour of marginal product in the law of variable proport

1.	State the behaviour of marginal product in the law of variable proportions. Explain the causes of this behaviour.
Answer» Solution :N/AThe law of diminishing RETURNS to a factor states that Marginal Product of a factor initially rises with its employment LEVEL, but after a certain level of employment it starts falling and ultimately becomes negative. Reasons behind Phase-1 (i) BETTER utilisation of fixed factor. (ii) Effecient utilisation of variable factor. (iii) Better co-ordination between factors. Reasons behind Phase-2 (i) Over-utilisation of the fixed factor. (ii) Imperfect Substitution of factors. (iii) Poor Coordination. Reasons behind Phase-3 (i) FIXITY of fixed factor. (ii) Overcrowding of fixed factor. (iii) DEFECTIVE factor ratio.