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In economics, diminishing returns are the decrease in marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, holding all other factors of production equal (ceteris paribus).
Karl Montevirgen. The law of diminishing returns says that if you keep increasing one factor in the production of goods (such as your workforce) while keeping all other factors the same, you’ll reach a point at which adding more inputs will begin to hamper the production process.
29. Apr. 2024 · The Law of Diminishing Returns, also known as the principle of diminishing marginal returns, is a fundamental concept in economics that describes the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while all other factors of production ...
21. Juli 2021 · Definition: Law of diminishing marginal returns. At a certain point, employing an additional factor of production causes a relatively smaller increase in output. Diminishing returns occur in the short run when one factor is fixed (e.g. capital)
16. Aug. 2023 · Saddique Ansari • August 16, 2023 • 5 min read. What is the Law of Diminishing Returns? This law states that when a variable factor of production is added to some fixed factors of production, the marginal product (MP) initially increases but eventually diminishes.
11 years ago. Actually, the law of diminishing returns applies to the marginal productivity. So your solution of adding additional workers doesn't work. The law says that with increasing inputs (capital / labor) the returns will keep becoming less and less, and yes eventually even negative.
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- Sal Khan
What is the law of diminishing returns? The law of diminishing returns is an economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.
