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Define law of variable proportions. |
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Answer» According to law of variable proportions, as more and more units of a variable factor are combined with same quantity of fixed factors, total production first increases at an increasing rate, then at diminishing rate, and finally starts diminishing. It implies that marginal product first rises and then diminishes eventually. Law of variable proportions is also known as Law of Returns to a Factor. It is a short-terin concept. |
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