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What is the law of variable proportions? |
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Answer» Law of Variable Proportions: The law states 'if more and more units of variable factor are employed with fixed factors, total product increases at an increasing rate in a beginning, then increases at a diminishing rate and finally starts falling'. Since increase in total product by employmnet of an additional unit of a variable factor is called marginal product, this law can be defined in terms of MP also. If quantities of a certain variable factor are increased while quantities of other factors are fixed, MPP first increases, then falls but remains positive and finally becomes negative. It is a short period concept. |
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