the joint explanation of Laws of return

2. LAWS OF RETURN
According to W.J.L. Rayan three laws of return ( law of increasing return, law of constant return and
law of decreasing return) are not three separate laws. Instead, those are three parts of the same
law which is called law of variable proportions. According to this law when each unit of variable
factor of production i.e labour and capital are increased with the fixed factor of production, the
marginal product firstly increase then tend to fall. Thus law of variable proportion represent three
different stages of production process carried out by a firm. This law is also called the “law of non-
proportional return.”

3. JOINT EXPLANATION OF LAWS OF RETURN
Fixed Factor of
production
(Land)
Variable
factorof
production
(Labour)
Total Product
(amnuds)
Marginal
Product
(Manuds)
10 Acres 1 10 10
10 Acres 2 30 20
10 Acres 3 60 30
10 Acres 4 90 30
10 Acres 5 120 30
10 Acres 6 140 20
10 Acres 7 150 10 0 1 2 3 4 5 6 7
10
20
30
MarginalProduct
Units of Labour
Constant return

4. JOINT EXPLANATION OF LAWS OF COST
Fixed
Factor of
production
(Land)
Variable
factor of
production
(Labour)
Total
Product
(amnuds)
Marginal
Product
(Manuds)
Wage Marginal Cost
(per Manud)
10 Acres 1 10 10 100 10
10 Acres 2 30 20 100 5
10 Acres 3 60 30 100 3.3
10 Acres 4 90 30 100 3.3
10 Acres 5 120 30 100 3.3
10 Acres 6 140 20 100 5
10 Acres 7 150 10 100 10 0 1 2 3 4 5 6 7
2
4
6
MarginalCost
Units of Labour
Constant cost
8
10