Explain the law of variable proportion with the help of diagram/ schedule.
Or
What is the likely behavior of total product/marginal product when only one input is increased for increasing production? Used diagram/Schedule.
This law states that
In case of TP:
"If more and more units of a variable factor are employed with fixed factors, total product (TP) increases at diminishing rate and finally starts falling."
In case of MP:
"If quantities of a certain variable factor are increased while quantities of other factors are fixed, MP first increases, then may become constant and finally declines."
Tabular and Diagrammatic presentation:
| Land (Acre) | No. of labourers | TP (Quintal) | AP (Quintal) | MP (Quintal) | |
| 1 | 0 | 0 | 0 | - | |
| 1 | 1 | 2 | 2 | 2 | Ist Phase |
| 1 | 2 | 6 | 3 | 4 | |
| 1 | 3 | 12 | 4 | 6 | |
| 1 | 4 | 16 | 4 | 4 | 2nd Phase |
| 1 | 5 | 18 | 3.6 | 2 | |
| 1 | 6 | 18 | 3 | 0 | |
| 1 | 7 | 14 | 2 | -4 | 3rd Phase |
| 1 | 8 | 8 | 1 | -6 |
Behaviour of TPP and MPP:
First Phase: TPP (TP) increases with increasing rate upto A point. MPP (MP) also increases and becomes maximum at point C.
Second Phase: TPP increases with diminishing rate and it is maximum at point B. MPP starts to decline and becomes zero at D point.
Third phase: TPP starts to decline and MPP becomes negative.
Assumptions of the law: The law operates on the basis of the following assumptions:
- Technique of production does not change.
- Different quantities of one factor can be varied with fixed factors.
- All units of variable factors are equally important.
- Factors of production are not perfect substitutes.
- There is short period of operation.
