The Law of Variable Proportions states that as only one input is increased, others remaining unchanged, Total Product (TP) changes in three phases.
Phase: I TP rises at an increasing rate.
Phase: II TP rises at decreasing rate.
Phase: III TP falls.
Reason:
Phase: I TP rises at an increasing rate because in the beginning as the quantity of the variable input is increased efficient utilisation of fixed input takes places due to specialisation. This raises efficiency of the variable input.
Phase: II TP now rises at a decreasing rate because as the variable input is increased, there is pressure on fixed inputs leading to decline in efficiency.
Phase: III TP starts falling because the quantity of the variable input becomes too much in relation to the fixed input.