law of proportions definition

law of proportions

Economic concept that an increase in returns from a manufacturing operation occurs when a change in the proportion in which factors of production are combined is toward the optimum; and a decrease occurs when that change is away from the optimum. For example, a fall in the cost of capital equipment in relation to the cost of labor would stimulate capital intensive production.

law of proportions is in the Economics, Politics, & Society subject.

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