The Economical Keda

Production 

Law of variable proportion

Law of variable proportion examines input and output relationship when output is increased by changing the quantity of one variable factor and other factors constant. According to this law if the more variable factor is employed with a fixed factor, the total product initially increases at an increasing rate, then increases at a decreasing rate and finally start falling.
assumption of the law are:-

• The ratio in which factor of production is combined can be changed.

• State of technology doesn’t change.

• Unit of a variable factor is homogeneous or equally efficient.

• There is a short period of production.

land labour tp mp ap=tp/l

1 1 2 2 2

1 2 5 3 2.5

1 3 9 4 3

1 4 12 3 3

1 5 14 2 2.8

1 6 15 1 2.5

1 7 15 0 2.1

1 8 14 -1 1.7

Phase 1 – In phase 1 TP first increases at an increasing rate and MP also increases at an increasing rate.

Phase 2 – In phase 2 TP increases at a diminishing rate and MP start falling.

Phase 3 – In phase 3 TP start falling and MP start falling.