Definitions for "Law of Diminishing Marginal Returns"
Describes a phenomenon observed in all short-run production processes, when at least one input (usually capital)is fixed. As more and more units of a variable input (usually labor) are added to the fixed input, the additional (marginal) output associated with each increase in units of the variable input will eventually decline. In other words, successive increases in a variable factor of production added to fixed factors of production will result in smaller increases in output. View Capstone Lesson(s) that address this concept
According to this law, if equal increments of an input are added (and if the quantities of other inputs are held constant), the resulting increments of product will decrease beyond some point-that is, the marginal product of the input will eventually diminish.
A law of economics stating that, as the number of new employees increases, the marginal product of an additional employee will at some point be less than the marginal product of the previous employee.
A law that stipulates that there is a point at which investment in quality improvement will become uneconomical.