## >> Tuesday, May 26, 2009 Law of variable proportion states that if we increase one variable resource of production for increasing output , then after some time total production will increase with decreasing proportion and marginal and average production will decrease. In simple world there is no substitute of any resource of production . Marshall says this law as law of agriculture but this law is universal in real sense.

For example

A person wants to increase his agricultural production , for this he starts to produce with increase the number of laborers but no. of land is constant one means he does not increase the proportion of land . Effect of this will show on its production . For some time production will increase with decreasing proportion , after some time total production will not change and then it will to decrease and marginal production will start to decreasing from beginning point of production .

Table

Land piece ↓ no. of labours ↓ total production ↓ Average production ↓ Marginal production
1 2 10 5 -
1 3 12 4 2
1 4 12 3 0
1 5 10 2 - 2
From above table , we can make you understand that we are increasing just no. of labourers , it increases implied unemployment and this will effect on production and production will start to decrease .

Main reasons of applying this law

1. No perfect substitute of any fixed resource

There are four major resources of production like land , labour , capital and entrepreneur . We can not use one resources always for increasing production. If we do the production with this one variable resource , then total production will start to decrease after some time .

2. Apply the law of diminishing return

Law of variable proportion is also depend on law of diminishing return . In short period of time , when we increasing the input , marginal output will decreases . Marginal production means the production by increasing one more unit of input . Every next input will decrease the amount of marginal output and in beginning , some time marginal production will increase for effective utilization of resources , after this marginal production will equal to zero and then marginal production will start to negative . |