Law of variable Proportions states that as more and more of the variable factor is combined with the fixed factor, marginal product (MP) of the variable factor may initially increase and subsequently stabilise but must decrease finally. Of course, initially, MP may rise owing to better coordination with the factors and better utilisation of the fixed factor. Thus, we have three phases of production, viz., phases of increasing MP, decreasing MP and negative MP. It is further illustrated through a fig. In a situation when MP is increasing, rate. And, when MP is negative, TP should be declining of course, TP should be maximum when MP = 0
