Diminishing returns refers to a situation where a firm is trying to expand by using more of its variable factors, but finds that the extra output they get each time they add one gets progressively less and less. This usually arises because their capacity is limited in the short-run and the combination of the fixed and variable factors becomes less than optimal.
The fall in the marginal product of a factor or factors that eventually occurs as input of that factor rises, holding the input of at least one other factor fixed, according to the Law of Diminishing Returns.
As more and more of a productive resource is added to a given amount to other productive resources, additions to output will eventually diminish other factors, such as technology and the degree of specialization remaining constant.
(p. 9) As you get more of something, the benefits per unit decrease. Most economic functions assume diminishing returns.
The decreases in the marginal product of a factor of production as more of the factor is employed, other inputs held constant.
the principle that says as one input increases, with other inputs fixed, the resulting increase in output tends to be smaller and smaller
A condition in which unrestrained population growth causes the standard of living to decrease to a subsistence level where poverty, misery, vice, and starvation makes life permanently drab and miserable. This dreary prophecy has led economics to be called ¡§the dismal science."
When additional units of a factor of production are added, a point will be reached where the additional output resulting from each added unit begins to decrease. That is called the point of diminishing returns. A colloquial expression of this is "too many cooks in the soup". Diminishing returns is a universal principle (all else being equal) because production is limited in space and time, and things can get crowded.
A concept in valuing real estate, recognizing that while improvements to property tend to increase market value, investment return will begin to fall when improvements exceed the natural rate of growth in market value.
Is a situation where a firm is trying to expand by using more of its variable factors, but finds that the extra output they get each time they add a unit of production is progressively less and less.
In economics, diminishing returns is also called diminishing marginal returns or the law of diminishing returns. According to this relationship, in a production system with fixed and variable inputs (say factory size and labor), beyond some point, each additional unit of variable input yields less and less additional output. This concept is also known as the law of diminishing returns or law of increasing opportunity cost.