Modern Economic Theory

Modern Economic Theory We have seen that the law of diminishing returns has a wide application. But it specially applies to agriculture and other extractive industries. One thing that is common to all these industries is the supremacy of nature. It is, therefore,...

Limitations of the Law of Diminishing Returns

Limitations of the Law of Diminishing Returns situations. There are several exceptions to law as it applies in agriculture: (i) Improved methods of cultivation. Man’s in genuity is ever striving to counteract the operation  this law by improving the technique of...

ASSUMPTIONS OF THE LAW OF VARIABLE PROPORTIONS

ASSUMPTIONS OF THE  LAW OF VARIABLE PROPORTIONS The law of variable propotions, as stated above, 2. Stigler, GJ. -Theory a/price, 1953, 3. Samuelson, P.A..-Economlcs, 8th Ed. p.2S. 4. Benham, F.. Economics, 1960, P.1I0. 5. Boulding, K.E. -Principles of Economics holds...

Law of Variable Proportions

Law of Variable Proportions The total production (i.e., return) goes on increasing till it reaches the maximum where the third stage  starts. The marginal return reaches leh maxunmum thc earliest and starts diminishing the first (j.e., in the firststage), The average...

LAW OF DIMINISHING RETURNS

LAW OF DIMINISHING RETURNS Statement of the Law. In the absence of the law of diminishing returns, “the science or political economy”, says Cairnes, “would be as completely revolutioniscd  asif human nature itself were altered”. Such is the...