Assumptions of Law of Variable Proportions

The law of variable proportions is based on the following assumptions:

• The law of variable proportions assumes that all units of the variable factor that are used with the fixed factor are homogeneous or absolutely alike in all respects and attributes.
• It is also assumed that there is no change in technology and production methods any improvement in technology or work methods may prevent the law of variable nay improvement in technology or work methods may prevent the law of variable proportions operating at least for some time.
• There are two inputs one of which is fixed and the other is variable (e.g. labour). The law becomes operative only when the fixed input remains fixed of supply condition remains unchanged.

The assumption of short period itself rules out any technology progress and increase in supply of the fixed factor. Thus homogeneous character of all the units of the variable factor is the essential assumption of short run analysis of production.