law of variable proportion

Mc 103 eco

1. Presentation on Topic : Law of Variable Proportion Presented By : Sangeeta Saini M.Com(P) 641

2. Production function. Types of production function. Law of variable proportion. Assumptions . Three stages of production. Conditions of applicability. Difference between law of variable proportion and return to scale. Conclusion.

3. PRODUCTION FUNCTION Production function refers to the technical relationship between the quantity of good produced and the factors of production necessary to produce it. Y= F(L,K,S) Y= production F=function L=labour K=capital S=land

4. Law of variable proportion The law of variable proportions is that law which predict the consequences of varying the proportions in which the fixed and variable factors of production are used.

5. A ssumptions One of the factor is variable while all other factors are fixed. All units of variable factors are homogeneous. There is no change in the technique of production. Factors of production can be used in different proportion

6. Units of land Units of labour Total product Marginal product Average product TP L (1) (2) (3) (4) (5) 1 1 1 1 1 2 3 4 2 5 9 12 - 3 4 3 2 2.5 3 3 1 1 1 5 6 7 14 15 15 2 1 2.8 2.5 2.1 1 8 14 -1 1.7 End of the first stage and beginning of second stage End of second stage and beginning of the third stage

7. T hree stages of production

8. Conditions of applicability

9. Basis of difference Law of variable proportions Law of return to scale Variable and fixed factors Only variable factors are changed and fixed factors remain the same. All the factors are increased simultaneously. Stages There are three stages: Increasing returns Diminishing returns Negative returns There are three stages: Increasing returns Constant returns Decreasing returns Time period Applies in the short run. Applies in the long run. Difference between law of variable proportion and returns to scale

10. In conclusion ,we can say that Law of variable proportion applies to the inputs used in agriculture as well as industry. Conclusion

11. Any Query?