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August 2, 2021 8:29 pm 30 pts
4. Imperfect Substitutes: Mrs. Joan Robinson has put the argument that impertect substitution of factors is mainl responsible for the operation of the law of diminishing returns. One factor cannot be used in place of the other factor After optimum use of fixed factors, variable factors are increased and the amount of fixed factor could be increase by its substitutes. The postponement of the law of variable proportions is possible under following conditions ) Improvement in Technique of Production: The operation of the law can be postponed in case variak factors techniques of production are improved. (ii) Perfect Substitute The law of variable proportion can also be postponed in case factors of production made perfect substitutes i.e., when one factor can be substituted for the other.
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Imperfect substitutes, also known as close substitutes, have a lesser level of substitutability, and therefore exhibit variable marginal rates of substitution along the consumer in...