giving reasons explain the law of variable proportions
Answers
“The law of variable proportion states that if the inputs of one resource are increased by equal increment per unit of time while the inputs of other resources are held constant, total output will increase, but beyond some point, the resulting output becomes higher will become smaller and smaller.”
Assumptions
The Law of Variable Proportions is based on the following assumptions:
Stable technology
The state of technology is assumed to be given and steady. If there is an enhancement in technology the production function will obviously move in the upward direction.
Factor proportions are changeable
The law assumes that factor proportions are variable. If factors of production are to be mixed in a permanent proportion, the law has no authority.
Homogenous factor units
The units of the variable factor are all the same. Each unit is the same in quality and amount with every other unit.
Short run:
The law operates in the short-run when it is not promising to differentiate between all factor inputs.