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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The principle of '''diminishing marginal returns''' states that [[production system]]s have a point beyond which each additional unit of [[input]] will yield less and less additional [[output]]. 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.
 
  
 
[[Category:Economics]]
 
[[Category:Economics]]

Revision as of 00:12, July 13, 2007

The principle of diminishing marginal returns states that production systems have a point beyond which each additional unit of input will yield less and less additional output. All other factors of production are held fixed for this analysis.

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