Question

One of the input must be fixed and it is because of the limited availability of this factor that diminishing returns exists?What is meant by above lines?

Answer 1

Shivang,

The given line is one of the assumptions of Law of Variable Proportion. It means that the inputs that we are using for the production, one of the input must be fixed. ​It is the scarcity of fixed factors over the variable factors that causes the marginal product to fall and thus leads to diminishing returns to factor.