Law of proportions

Law of proportions,

Definition of Law of proportions:

  1. 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.

Meaning of Law of proportions & Law of proportions Definition