The law of variable proportions is also known as

Step 1: Analyze the question The question asks for another name for the law of variable proportions. This is a production theory concept in Economics.

Step 2: Explain the concept The law of variable proportions describes what happens to output when you increase one variable factor (e.g., labour) while keeping the other factors (e.g., land or capital) fixed. It is a short-run concept.

It states that as more units of the variable factor are added to a fixed factor, output initially rises at an increasing rate, then at a decreasing rate, and eventually total output may fall. Because of this eventual decline in extra output, it is also called the law of diminishing returns.

Step 3: Evaluate the options

• A. Law of demand: This deals with the relationship between price and quantity demanded, so it is not a production law.
• B. Law of diminishing returns: This matches exactly. The two names refer to the same principle.
• C. Law of diminishing marginal utility: This is about consumer satisfaction falling as more units of a good are consumed, which is a consumption concept, not production.
• D. Law of returns to scale: This is a long-run concept in which all factors change together. The law of variable proportions is a short-run concept in which only one factor changes, so the two are different.

Step 4: Answer The correct option is B. law of diminishing returns.

Exam tip: Remember the contrast:

• Variable proportions = diminishing returns → short run, one factor varies.
• Returns to scale → long run, all factors vary.

If you see "variable" or "fixed factor" in a question, think diminishing returns.