Explain the three stages of law of variable proportion
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The state of technology is assumed to be given and constant. If there is an improvement in technology the production function will move upward.
(ii) Factor Proportions are Variable:
The law assumes that factor proportions are variable. If factors of production are to be combined in a fixed proportion, the law has no validity.
(iii) Homogeneous Factor Units:
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The units of variable factor are homogeneous. Each unit is identical in quality and amount with every other unit.
(iv) Short-Run:
The law operates in the short-run when it is not possible to vary all factor inputs.
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