Returns to a factor refers to the behaviour of physical output owing to change in physical input of a variable factor, fixed factors remaining constant. Assumptions of Law of Variable Proportions:: 1. It operates in short run, as factors are classified as variable and fixed factor, 2. The law applies to all fixed factors including land. 3. Under law of variable proportions, different units of variable factor can be combined with fixed factor. 3. This law applies to the field of production only. 4. The effect of change in output due to change in variable factor can be easily determined. 5. It is assumed that, factors of production become imperfect substitutes of each other beyond a certain limit. 6. The state of technology is assumed to be constant during the operation of this law. 7. It is assumed that all variable factors are equally efficient.             Table: Law of Variable Proportions Fixed Factor (Land) (acres) Variable Factor (Labour) Total Product (units) Marginal Product (units)  Phase 1 1 10 10 Phase I: Increasing Returns to a Factor 1 2 30 20 1 3 45 15   Phase II: Diminishing Returns to a Factor 1 4 52 7 1 5 52 0 1 6 48 -4 Phase III: Negative Returns to a Factor