0
oh it gives u blonde hair
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What is the explanation for the law of variable proportions?
The law of variable proportions or diminishing returns has been stated by Bentham in the following manner."As the proportion of one factor in a combination of factors is increased, after a point, first the marginal and then the average production of that factor will diminishing".The behaviour of output as a result of change in the proportion of variable factors to the fixed factor can be studied through three stages.Assumptions of the Law:The state of technology is assumed be given and unchanged.The law specially operates in the short run because some factors are fixed and the proportion between factors is disturbed.Variable factor units are homogeneous or identical in amount and quality.The law is based on the possibility of varying the proportions in which the various factors can be combined to produce a product.The behaviour of these total, average and marginal products of the variable factor as a result of the increase in its amount is generally divided into three stages.Stage-I (Increasing Return)Total Product increases at an increasing rate to a particular point say F. Corresponding to the point F Marginal Product increases up to this level. From the point F Total Product goes on rising at a diminishing rate and Marginal Product starts falling -but is still higher than Average Product and the AP continues to rise. 1st stage ends where MP curve cuts AP curve from above.Stage-II (Diminishing Return)The second stage begins from the point of intersection of AP and MP curves and ends at that point where" MP is zero. At this stage both MP and AP go on falling and both of them are positive. The total product goes on rising at a diminishing rate. This stage is known as the stage of diminishing return. This is stage where a firm wishes to operate.Stage-III (Negative Return)In the third stage Marginal Product of variable factor is zero. MP curve cuts the OX-axis at point M. In this stage the Total Product starts diminishing. Total Product continues to decline. As MP is negative this stage is also known as the stage of negative return.
Why long run average cost decreases as output increases?
It decreases in the long run because of the law of diminishing returns which states thatthat as equal quantities of one variable factor are increased, while other factor inputs remain constant, all things remaining equal, a point is reached beyond which the addition of one more unit of the variable factor will result in a diminishing rate of return and the marginal physical product will fall...................hope this helps
What is the marginal physical product?
The resulting rate of change in a firms output as a result of employing one extra unit of a factor of production for example labour.
The equality of marginal revenue and marginal cost is essential for profit maximization in all market structures because if?
Marginal revenue and marginal cost are equal, any other output level will result in reduced profit.
What is meant by marginal cost?
Marginal product is the result of an additional output of production. An example is adding an hour to an employeeâ??s work schedule to produce 100 more cookies. Marginal cost is the cost associated with producing an additional output. An example is paying an employee the overtime rate per hour for producing 100 more cookies.
Define the Law of Diminishing Returns?
the characteristic of any production system in which increases in variable inputs result in increasing reduction of total output. An indicator of when to stop making additional inputs to the system, when the input exceeds the additional output.
The result of multiplication?
The result of the process of multiplication is referred to as a 'product'
What happens when supply shifts to left and demand shift to the right?
The price of the product will increase as a result from both shifts.
Importance of the law of variable proportions?
Sometimes referred to as variable factor proportions, law of diminishing returns states that as equal quantities of one variable factor are increased, while other factor inputs remain constant, ceteris paribus, a point is reached beyond which the addition of one more unit of the variable factor will result in a diminishing rate of return and the marginal physical product will fall.
True or false. The U shape of the long-run ATC curve is the result of diminishing returns?
False
Is a product what you get after adding?
No, a product is the result from multiplication. A sum is the result of addition.
How is market failure cause environmental degradation?
It is when the private marginal benefits or costs are not equal to social marginal benefits cost. Therefore, result could be likely market failure.
