Question

Explain the reasons for: (i) increasing return to a factor (ii) diminishing returns of factor. for class 11​

Answer 1

Answer:

1. Increasing Return To A Factor

Law of Increasing Returns may be defined as - the proportion of one factor in a combination of factors is increased up to a point, the marginal product of the factor will increase.

2. Diminishing Returns of Factor

The Law Of Diminishing Marginal Returns states that adding an additional factor of production results in smaller increases in output. After some optimal level of capacity utilization, the addition of any larger amounts of a factor of production will inevitably yield decreased per-unit incremental returns.

Answer 2

Explanation:

$\huge{\underline{\underline{\purple{A}\pink{n}\green{s}\blue{w\red{e}\orange{r}}}}}$

Causes for the Operation of Law of Diminishing Returns (General Application of the Law):

Fixed Factors of Production: The law of diminishing returns applies because certain factors of production are kept fixed. ...

Scarce Factors: ADVERTISEMENTS: ...

Lack of Perfect Substitutes: ...

Optimum Production: