The law of variable proportions states that, keeping other factors constant, when you increase the variable factor, the marginal product of the factor input will eventually _____.

The correct answer is Decrease

Key Points

• Law of variable proportions states that, keeping other factors constant, when you increase the variable factor, the marginal product of the factor input will eventually Decrease. (Hence Option 4 is correct)
• This is because as we add more and more of the variable factor, it will eventually become less and less productive.
• For example, if you are a farmer and you add more and more workers to your field, at first the workers will be able to work more efficiently because they will have more space to work in.
• However, after a certain point, the workers will start to get in each other's way and the marginal product of each worker will start to decline.
• The law of variable proportions can be divided into three stages:
  • Stage 1: The marginal product is increasing. This is the initial stage, where the variable factor is still relatively scarce and each additional unit of the factor adds a significant amount to the total output.
  • Stage 2: The marginal product is diminishing. This is the middle stage, where the variable factor is becoming more abundant and each additional unit of the factor adds less to the total output.
  • Stage 3: The marginal product is negative. This is the final stage, where the variable factor is so abundant that each additional unit of the factor actually causes the total output to decrease.