Answer to Question #124975 in Economics for Charu

Question

Explain law of variable proportion with suitable table and diagram ?

Answer 1

The law cannot be proved in a formal way. It was created in agriculture. There he received the name "law of diminishing soil fertility"). At the end of the 19th century, the universal nature of this law was proved. It operates not only in agriculture, but also in any production. If profitability (productivity) is expressed in money.

The wording of the law: if at least one of the resources used remains unchanged, there will inevitably come a moment after which each next unit of the variable resource gives less return than the previous one.

Labor is also subject to the law of diminishing returns, as can be seen from the table below.