Explain the law of variable proportions with the help of total product and marginal product curves.
Explain the law of variable proportions with the help of total product and marginal product curves.
The law of 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 increases in the beginning, then it starts falling but remains positive and ultimately it contains to fall but also becomes negative. The following schedule and diagram illustrate the law:
The schedule and diagram show that there are three phases of the law of variable proportions. In the phase I, TPP increasesat 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 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 increases in the beginning, then it starts falling but remains positive and ultimately it contains to fall but also becomes negative. The following schedule and diagram illustrate the law:
The schedule and diagram show that there are three phases of the law of variable proportions. In the phase I, TPP increasesat 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.
