Question

explain the reasons of increasing and dimnishing return to factor

Answer 1

Diminishing returns occur in the short run when one factor is fixed.
If the variable factor of production is increased then there comes a point where it will become less productive and therefore there will eventually be a decreasing diminishing return.
This because the capital is fixed.

Answer 2

The reasons of increasing and dimnishing return to factor are

• Efficient utilisation of fixed factors increases return to a factor arise due to affective utilisation of fixed factor.

• Division of labour: it causes avocation among the workers according to their spells capability.

• Volumed discount: are economiser in purchases of raw material in large quantities.