The law of variable proportions, also known as the law of diminishing returns, states that if a variable quantity of one resource is applied to a fixed amount of other input, output per unit of variable input will increase but beyond some point the resulting increases will be less and less, with total output reaching a maximum before it finally begins to decline. This principle can also be defined thus: When more and more units of the variable factor are used, holding the quantities of a fixed factor constant, a point is reached beyond which the marginal product will diminish.