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Home Laws of Returns

Laws of Returns:

 

Production Function:

 

A given output can be produced with many different combinations of factors of production (land, labor, capita! and organization) or inputs. Continue reading.

 

Law of Variable Proportions:

 

There were three laws of returns mentioned in the history of economic thought up till Alfred Marshall's time. These laws were the laws of increasing returns, diminishing returns and constant returns. Continue reading.

 

Law of Diminishing Returns:

 

The law of diminishing returns (also called the Law of Increasing Costs) is an important law of micro economics. Continue reading.

 

Law of Increasing Returns:

 

The law of increasing returns is also called the law of diminishing costs. The law of increasing return states that when more and more units of a variable factor is employed, while other factor remain fixed, there is an increase of production at a higher rate. Continue reading.

 

Law of Constant Returns:

 

The law of constant returns also called law of constant cost. It is said to operate when with the addition of successive units of one factor to fixed amount of other factors, there arises a proportionate increase in total output. Continue reading.

 

Law of Costs:

 

Law of Costs is also known as laws of returns. As an industry is expanded with the increased investment of resources, the marginal cost (i.e., the amount which is added to the total cost when the output is increased by one unit) decreases in some cases, increases in others and in some, it remains the same. Continue reading.

 

Law of Returns to Scale:

 

The law of returns are often confused with the law of returns to scale. The law of returns operates in the short period. It explains the production behavior of the firm with one factor variable while other factors are kept constant. Continue reading.

 

 

 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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