Difference between revisions of "Diminishing marginal returns"
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| − | + | Diminishing marginal returns consist of the inevitable point beyond which additions of a variable factor (input) will yield diminishing marginal returns (output) per unit of the variable factor. All other factors of production are held fixed for this analysis. | |
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| + | Note that at first there may be increasing marginal returns, and this principle about diminishing marginal returns expresses what will be inevitably reached. | ||
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| + | [[Category:Economics]] | ||
Revision as of 15:24, June 25, 2007
Diminishing marginal returns consist of the inevitable point beyond which additions of a variable factor (input) will yield diminishing marginal returns (output) per unit of the variable factor. All other factors of production are held fixed for this analysis.
Note that at first there may be increasing marginal returns, and this principle about diminishing marginal returns expresses what will be inevitably reached.