# what are the assumptions of Law of variable proportion?are there any limitations of this Law??

grgsiocl | Teacher | (Level 2) Honors

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The law of variable proportions

The law examines the relationship between one variable factor and output, keeping the quantities of other factors fixed.

Definition

As the proportion of one factor in a combination of factors is

increased, after a point, first the marginal and then the average product of that factor will diminish.

Assumptions of the law

The law is based on the following assumptions

(i) Only one factor is made variable and other factors are kept

constant.

(ii) This law does not apply in case all factors are proportionately

varied. i.e. where the factors must be used in rigidly fixed

proportions to yield a product.

(iii) The variable factor units are homogenous i.e. all the units of variable factors are of equal efficiency.

(iv) Input prices remain unchanged

(v) The state of technology does not change or remains the same at a given point of time.

(vi) The entire operation is only for short-run, as in the long-run all inputs are variable.