Enlist the principles of farm management
Answers
The Law of Diminishing Marginal Returns:
This law states that “An increase in the capital and labour applied to the cultivation of land causes in general a loss than the proportionate increase in the amount of produce raised unless it happens to coincide with an improvement in the art of agriculture.”
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There are three stages of the law of diminishing returns. They are 1) stage II and 3) stage III. The positions of the parameters i.e. TP (Total Product), AP (Average Product) MP (Marginal Product) and EP (Elasticity stages of production (see production function curve) are as under.
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Answer:
Explanation:
1. The Law of Marginal Returns: The increase in the labor and capital applied for the process of cultivation of the agriculture land may cause the general loss of the proportionate increase in the amount of produce.
2. Law of Equimarginal Returns: It is the process of allocation of the limited concentration of resource to different enterprises. The profit can be maximized by using the resource in such a manner that the marginal returns from the resources will become equal in all the cases.
3. Law of Substitution: The profit maximization can be accomplished by two ways these include the one way by which output is increased and cost is minimized and the other way includes the maximization of the cost and use of more than one resource for the resource that is not available or as a substitute.