Explain the law of variable proportion with the help of total and marginal physical product curves schedule.
Explain the law of variable proportion with the help of total and marginal physical product curves schedule.
The law of variable proportions states that if we go on using more and more units of a variable factor (labour) with a fixed factor (land), the total physical product increases at an increasing rate in the beginning, then increases at a diminishing rate after a level of output and ultimately it falls. In accordance with law, the marginal physical product initially increases. It then starts falling but remains positive, and ultimately becomes negative. The following schedule and diagram illustrate the law:
Units of LandUnits of LabourTPPLMPPLPhases(Acres)1111233712345⎤⎥⎦TPP rises at an increasingrate, i.e., MPP rises1111145678161921222243210⎤⎥
⎥
⎥
⎥
⎥
⎥⎦TPP rises at diminishingrate, i.e., MPP falls bothremains positive119102119−1−2]TPP falls, i.e, MPPbecomes negative
The schedule and diagram show that there are three phases of the law of variable proportions. In phase I, TPP increases at an increasing rate and MPP rises. In phase II, TPP increases at decreasing rate and MPP falls but remains positive. In phase III, TPP starts falling and MPP becomes negative. Phase I is upto point M and phase II is from point M to point T. Phase III is after T.
The law of variable proportions states that if we go on using more and more units of a variable factor (labour) with a fixed factor (land), the total physical product increases at an increasing rate in the beginning, then increases at a diminishing rate after a level of output and ultimately it falls. In accordance with law, the marginal physical product initially increases. It then starts falling but remains positive, and ultimately becomes negative. The following schedule and diagram illustrate the law:
Units of LandUnits of LabourTPPLMPPLPhases(Acres)1111233712345⎤⎥⎦TPP rises at an increasingrate, i.e., MPP rises1111145678161921222243210⎤⎥ ⎥ ⎥ ⎥ ⎥ ⎥⎦TPP rises at diminishingrate, i.e., MPP falls bothremains positive119102119−1−2]TPP falls, i.e, MPPbecomes negative
The schedule and diagram show that there are three phases of the law of variable proportions. In phase I, TPP increases at an increasing rate and MPP rises. In phase II, TPP increases at decreasing rate and MPP falls but remains positive. In phase III, TPP starts falling and MPP becomes negative. Phase I is upto point M and phase II is from point M to point T. Phase III is after T.
