Difference between Law of Variable Proportions and Return to Scale

Difference between Law of Variable Proportions and Return to Scale

Write the differences between Law of Variable Proportions/ Law of Diminishing Marginal Product/ Return to Factors and Return to Scale.

PointsLaw of Variable ProportionsReturn to Scale
1. Nature of behaviourThe law of variable proportion is a firm’s short-run production behaviour.Return to scale is a firm’s long-run production behaviour.
2. ChangeabilityChange in all factors to increase production in the short-run is financially impossible.All factors can be changed in long-run.
3. Nature of ChangeIn this law, one factor is changed keeping the other factors constant.In this case, all factors together are changed.
4. PresentationIn case of an increase in factor to production, it is shown on the horizontal and vertical axis of the diagram.But in case of increasing return to scale, it is shown in an upward straight line from the origin.
5. Also known asThe law of variable proportions is also known as the law of diminishing marginal product. This law applies to agriculture, industry, mining, fisheries and house building.There is no other name for Return to scale. But it is applicable to production in terms of (i) increasing returns, (ii) constant returns and (iii) diminishing returns.

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