The marginal product of an input factor initially rises with its employment level and then, after a certain level of employment, it starts falling. This is known as:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Law of Variable Proportions
Suppose a farmer keeps the land fixed and adds workers one by one. The first few make better use of the land, so each adds more output than the one before; later each has less land to work with, and the extra output falls. This rise and then fall in the marginal product of a factor is the law of variable proportions, and it gives the MP curve the shape of an inverse ‘U’.
Why the other options are incorrect
Option (1) Production Function — Incorrect. The production function is the relationship between the inputs used and the output produced. The law describes how one input’s marginal product behaves along it, so it is not the production function itself.
Option (2) Cobb-Douglas Production Function — Incorrect. The Cobb-Douglas function, q = x1αx2β, is one particular form of production function, used to show returns to scale. It is not the name of the rise-and-fall pattern of marginal product.
Option (3) Law of Demand — Incorrect. The law of demand says that the quantity demanded of a good falls as its price rises. It belongs to consumer behaviour, not to production.
Note: A similar question was also asked in CUET (UG) 2026 on 13-05-2026 (Slot 2).
NCERT (2025-26): “3.4 The Law of Diminishing Marginal Product and the Law of Variable Proportions … This tendency of the MP to first increase and then fall is called the law of variable proportions or the law of diminishing marginal product. Law of variable proportions say that the marginal product of a factor input initially rises with its employment level. But after reaching a certain level of employment, it starts falling. Why does this happen? In order to understand this, we first define the concept of factor proportions. Factor proportions represent the ratio in which the two inputs are combined to produce output. As we hold one factor fixed and keep increasing the other, the factor proportions change. Initially, as we increase the amount of the variable input, the factor proportions become more and more suitable for the production and marginal product increases. But after a certain level of employment, the production process becomes too crowded with the variable input.…” |