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What is the law of diminishing marginal returns?

The law of diminishing marginal returns is also referred to as the "law of diminishing returns," the "principle of diminishing marginal productivity," and the "law of variable proportions." This law affirms that the addition of a larger amount of one factor of production, ceteris paribus, inevitably yields decreased per-unit incremental returns.

What is reducing marginal returns?

Diminishing marginal returns result from increasing input in the short run after an optimal capacity has been reached while keeping one production variable constant, such as labor or capital. Returns to scale refers to how the degree of change in input factors changes the output proportionally during production.

What are economies of scale and diminishing marginal returns?

What Are Economies of Scale? The law of diminishing marginal returns is contrasted with economies of scale, which are cost advantages companies experience when production becomes efficient, as costs can be spread over more goods. What Is an Example of Diminishing Marginal Returns?

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