Law of Diminishing Returns

law of diminishing returns

Diminishing Returns graph (wikipedia.org)

Definition

Law of Diminishing Returns (or Principle of Diminishing Marginal Productivity) is an economic concept which states that after a certain point has been reached – the point of diminishing returns – each successive application of a factor of production will add less to total output than before.[1]

For more information, see Wikipedia on diminishing returns.

 

References

  1. ^ American Marketing Association, AMA Dictionary.

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