Can the operation of the law of diminishing returns be postponed?

These factors can check the operation of the law of diminishing returns temporarily. But this law is bound to apply ultimately. These can be delayed in the application of the law but the law is definite to apply sooner or later.

What are the three stages of law of variable proportion Why does it not make any economic sense to produce in Stage 1 or 3?

In stage 1 the fixed factor is too much relative to the variable factor. Therefore, in stage 1, marginal product of the fixed factor is negative. On the other hand, in stage 3 the variable factor is too much relative to the fixed factor. Therefore, in stage 3, the marginal product of the variable factor is negative.

What are the causes for different stages of law of variable proportion?

Reasons for Law of Variable Proportions:

• Better Utilization of the Fixed Factor: ADVERTISEMENTS:
• Increased Efficiency of Variable Factor: When variable factors are increased and combined with the fixed factor, then former is utilised in a more efficient manner.
• Indivisibility of Fixed Factor:

Which is not a correct assumption for the law of variable proportions?

Incorrect assumption for the law of variable proportions is that the proportion of the factors of the production remains the same.

Why does the law of increasing returns operate?

Increasing returns mean lower costs per unit just as diminishing returns mean higher costs. Thus, the law f of increasing return signifies that cost per unit of the marginal or additional output falls with the expansion of an industry.

Which stage of law of variable proportion is diminishing return?

Stage II – The TPP continues to increase but at a diminishing rate. However, the increase is positive. Further, the MPP decreases with an increase in the number of units of the variable factor. Hence, it is called the stage of diminishing returns.

What does the law of variable proportions explain?

The law of variable proportions states that as the. quantity of one factor is increased, keeping the other. factors fixed, the marginal product of that factor will. eventually decline.

What is the essential condition for the law of variable proportion to hold good?

Assumptions: The law of variable proportions holds good under the following conditions: Constant State of Technology: First, the state of technology is assumed to be given and unchanged. If there is improvement in the technology, then the marginal product may rise instead of diminishing.

Which is not the correct stage of production in the law of variable proportions?

A producer does not operate in Stage I. In this stage, the marginal product increases with an increase in the variable factor. Therefore, the producer can employ more units of the variable to efficiently utilize the fixed factors. Hence, the producer would prefer to not stop in Stage I but will try to expand further.

How many phase are there in law of variable proportions?

Three Stages
Three Stages of the Law of Variable Proportions: These stages are illustrated in the following figure where labour is measured on the X-axis and output on the Y-axis.

What are the causes of increasing returns to factor and diminishing returns to Factor?

In the first phase, the supply of the fixed factor (say, land) is too large, whereas variable factors are too few. So, the fixed factor is not fully utilised. When variable factors are increased and combined with fixed factor, then fixed factor is better utilised and output increases at an increasing rate.