The Law of Variable Proportions

Economic theory involves many laws and theorems, which denote variable factors’ functioning in variable situations. To explain the law of variable proportion, many factors like production functioning, commodity output, etc., are on the same platform. This law usually states the variation in the marginal value of the product factor. This law is vital in economics, crucially determining the variable factor with the changes notified in the single input of the product. This law has many stages and assumptions, including specific variable factors changes. The law enforces the change in a single factor for change, and remaining all eh product factors have a fixed value.

Law of Variable Proportions: Definition

To explain the law of variable proportion and its definition, it is necessary to relate the factors, their combination and marginal and average product. According to the law of variable proportion, when there is a variation in one product factor, all the other factors remain fixed and undergo zero variation tendencies. It impacts the marginal factor and product factor in any activity. Product functioning is the one variable factor in this activity. 

When, the law of variable proportion starts operating according to its regulation, the commodity out increases. Indeed, when the number of factors increases, there is a noticeable alteration in the proportion of the factors. According to this law, the ratio of the employment factor and fixed factor on the single platform increases when the variable factors increase quantitatively.

Stages of the Law

There are three stages to discuss the law of variable proportion. These stages state the condition of the marginal product and average product of the factor which undergo variation. These three stages denote variable conditions and the factors’ positioning with their impact on the adjacent aspects. Hence these stages are an integral part of the law of variable proportion. So let’s start with explaining the three stages of this law. Below are the mentions:

• Stage 1

To explain the law of variable proportion, the first stage is crucial. In this state, the factor travels from the initial to the endpoint. At the endpoint, the average product of the factor is equal to the marginal product. Explaining this stage further reflects that if the product increases at a particular rate and reaches the endpoint, it diminishes along with its total values. Similarly, the marginal product diminishes after increasing in the initial stage and reaching the final destination. After this diminishing process, both the factors, i.e. marginal and average product factors, become equal. At the end of this stage, the marginal product exceeds its value for the average product.

• Stage 2

To state the law of variable proportion with stage two, the total product starts diminishing after reaching the endpoint of the factor. The marginal product has the quick range to attain the zero value at a particular point. The average product is maximum at a specific range of its position and then decreases. Therefore, in this stage, the marginal product is less than the average product value of factors.

• Stage 3

In this stage, the total product undergoes a diminishing process to explain the laws of variable proportion. The value of the marginal product is negative in this stage, and the average product is negligible. The firm turns negative to retain any assistive support from labor in production. This stage reflects the value with the labor and marginal product is zero and the average product is zero as the firm is not producing any product. The employer has to employ more incredible laborers to attain the equal value of average and marginal products. In this case, the employer has to bear extra losses, which is the law of the variable proportion as per the state.

Assumptions

There are variable assumptions to discuss the law of variable proportion based on some of these specific factors. These factors impact the laws directly or indirectly. Hence these assumptions are necessary to consider while applying the law of variable proportion. Below are the details:

• Continuous Technological Support

To explain the law of variable proportion, the technology has special mentions. As the technical support increases and improves, the law of production function will also receive a similar output.

• Variable Factor Proportion

According to this assumption, if all the factors of production form a combination with the fixed proportions, the law will not be valid.

• Homogenous Nature of Factor Unit

The factor units of the production unit are precisely identical to each other. It has to explain the law of variable proportion by margining the quality and amount of each unit with identical value.

• Short-run program

According to this assumption, the law is applicable for short-run operations, and it is incapable of including all the assisting factors of the input unit.

Conclusion

To conclude, these are the assistive aspects of the laws of variable proportions. To explain the law of variable proportions in more detail, many examples of the working units with all the variable and marginal factors are present. Hence this law works according to the behavior of the average product and marginal values. The fluctuation in any of these can impact directly on the other factors. According to the law, all the other aspects are constant at a single variation, but practically all the constant aspects receive the functional and marginal changes.