LAW OF RETURN
We shall first study the laws of return which are different 0( , viz., the law of variable proportions, then returns to scale and in the ne 1 product curves. There are three laws of returns known to economists, the laws or di,diminishing increasing and constant return. ‘There is said to be increasing, decreasing returns according as the marginal returns rise, fall or remain unchanged” of a factor of production is increased. In terms of cost, an industry is subject ing, decreasing or constant returns according as the marginal cost of production [ rises or remains the same, respectively, with the expansion or an industry. As we shall explain below, these three laws arc only three aspects fir IIfIt” viz., the law of Variable Proportions, represent three different stages or the law. Now a word about each of these laws.
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