What is the law of diminishing marginal productivity?

Production managers consider the law of diminishing marginal productivity when improving variable inputs for increased production and profitability. The law of diminishing marginal productivity involves marginal increases in production resulting from an increase of an input employed. It can also be known as the law of diminishing returns.

What does reducing marginal product of Labor mean?

Study with Quizlet and memorize flashcards containing terms like Diminishing marginal product of labor occurs when adding another unit of labor 1. changes output by an amount smaller than the output added by the previous unit of labor. 2. decreases output by an amount smaller than the output added by the previous unit of labor. 3.

What is the law of diminishing marginal returns?

Inputs can include things like labor and raw materials. The law of diminishing marginal returns states that when an advantage is gained in a factor of production, the marginal productivity will typically diminish as production increases. This means that the cost advantage usually diminishes for each additional unit of output produced.