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i. Short run. The law assumes short run situation. The time is too short for a firm to change the quantity of fixed factors. All the resources apart from this one variable, are held unchanged in quantity and quality
ii. Constant technology. The law assumes that the technique of production remains unchanged during production.
iii. Perfect divisibility of factors of production
iv. Homogeneous factors. Each factor unit in assumed to be identical in amount and quality.
v. The production function is characterized by : a. decreasing marginal product (MP) for all factor-product combinations; b. decreasing rate of technical substitution between any two factors; c. an increasing rate of product transformation between any two products
marto answered the question on April 16, 2019 at 12:45