Factors/Causes of Internal and external economiesof scale
Diseconomies of small scale and large scaleproduction
aw of Variable Proposition
It is also known as ³Law of DiminishingReturns´
Assumption:A firm¶s production function consists of fixedquantities of all inputs (land,equipmentetc)except labour which is a variableinput.When the firm expands output byemploying more and more labour,it alters theproportion between fixed and the variableinputs.