Difference between law of diminishing returns and law of variable proportions
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Both refer to the same concept. Law of variable proportions is the new name for the “Law of diminishing product/returns” of classical economics. It holds that if a firm keeps increasing an input keeping all other inputs and technology constant, corresponding increase in output will decrease eventually.
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Heya user ✨✨
⏩Law of diminishing marginal return states that has more and more units of a commodity are consumed marginal utility derived from every additional unit must decline.It happenin response with of all good and services.
⏩Law of variable proportion state that has more and more of the variable factor is combined with the fixed factor marginal product of the variable factor me initially rise, but eventually a situation must come when marginal product of variable factor starts declining, marginal product may ultimately becomes zero or even negative.
⏩Law of diminishing marginal return states that has more and more units of a commodity are consumed marginal utility derived from every additional unit must decline.It happenin response with of all good and services.
⏩Law of variable proportion state that has more and more of the variable factor is combined with the fixed factor marginal product of the variable factor me initially rise, but eventually a situation must come when marginal product of variable factor starts declining, marginal product may ultimately becomes zero or even negative.
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