What is meant by returns to a factor?

Solution

Return to a factor means, 'Change' in total physical product when an additional unit of a variable factor is employed with fixed factors'. Alternatively 'when only one factor is increased keeping all other factors fixed, the resultant increase in output is called returns to a factor'. It is also known as 'law of return to a factor' although modern economists call it as 'law of variable proportion' because with increase in variable input, the proportion between variable factors and fixed factors gets changed.

Some More Questions From Production And Costs Chapter

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Production And Costs

What is meant by returns to a factor?

Some More Questions From Production And Costs Chapter

What is meant by change in supply?

Due to improvement of technology, marginal costs of production of televisions have gone down. How will it affect the supply curve of television?

What effect does a cost saving technological progress have on supply curve?

What effect does an increase in input price have on supply curve?

What effect does an increase in excise tax have on supply curve of product?

If a farmer grows rice and wheat, how will an increase in price of wheat affect supply curve of rice?

What is meant by market period?

How will an increase in number of firms shifts the market supply curve?

What is the shape of supply curve during very short (market period)?

What is the shape of supply curve during short or long period?

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