Q. 10 A5.0( 2 Votes )

State different p

Answer :

The law of variable proportion states that if we keep on increasing the units of variable factor (labour) with a fixed factor (Land), the behaviour of total product will be as below –

(1) Stage I Increasing Returns to Factor In this stage, Total Product increases at an increasing rate.


(2) Stage II Diminishing Returns to Factor In this stage, Total Product increases, but at a diminishing rate. Also, in this stage Total Product reaches its maximum and becomes constant.


(3) Stage III Negative Returns to Factor In this stage, Total Product begins to fall.


The graph and table given below, depicts the behaviour of Total Product across the three stages




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