Question

​​Why is returns to a factor termed as "Law of variable proportions"? How is production function in the short run different from the long run?

Answer 1

Dear Student,
One factor cannot be used in the place of the other factor. After optimum use of fixed factors, variable factors are increased and the amount of fixed factor could be increased by its substitutes. Such a substitution would increase the production in the same proportion as earlier. That's why returns to a factor termed as Law of variable proportions.
Production function in the short run is different from the long run because in the short run , fixed factors cannot be increased due to shortage of time , only variable factors can be increased to increase the output of level.
In long run, both fixed and variable factors can be increased i.e. capital , machinery, labour etc.
Regards