Law of variable proportion|| economics||Causes fully explained||Returns to factor||production theory

Law of variable proportions occupies an important place in economic theory. This law examines the production function with one factor variable, keeping the other factors fixed. It refers to the input-output relation when output is increased by varying the quantity of one input.



When the quantity of one factor is varied, keeping the quantity of other factors con­stant, the proportion between the variable factor and the fixed factor is altered; the ratio of employ­ment of the variable factor to that of the fixed factor goes on increasing as the quantity of the variable factor is increased. This law has played a vital role in the history of economic thought and occupies an equally important place in modern economic theory. This law has been supported by the empirical evidence about the real world.


Three stages are given as
Law of increasing returns or decreasing costs.
Law of diminishing returns or increasing costs.
And Stage of Negative returns .

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law of variable proportions of economics,