Law of Variable Proportion

The law of variable proportion is a fundamental concept in economics that explains the relationship between inputs and outputs in the production process. According to this law, as the proportion of one input is increased while the others are held constant, the marginal product of that input will eventually decrease. In other words, beyond a certain point, adding more of one input will not increase output by the same amount.

Satisfying the Law of Variable Proportion

Out of the given options, the following satisfies the law of variable proportion:

4. TP Increases increasing rate due to positive MP

Explanation:

When the marginal product (MP) of an input is positive, it means that adding one more unit of that input will increase the total product (TP). However, as more units of that input are added, the MP will eventually decrease due to diminishing returns. This is where the law of variable proportion comes into play.

According to the law of variable proportion, the TP will increase at an increasing rate as long as the MP is positive. This is because each additional unit of input is contributing more to the production process than the previous unit. However, beyond a certain point, the MP will start to decline, and the TP will increase at a decreasing rate. Eventually, the TP will reach a maximum point where the MP is zero, and any further increase in input will lead to a decrease in output.

Conclusion

In conclusion, the law of variable proportion is an essential concept in economics that explains the relationship between inputs and outputs in the production process. Understanding this law can help businesses optimize their production processes and maximize profits. Out of the given options, only option 4 satisfies the law of variable proportion.