He used it to show how additional labor and capital added to a fixed piece of land generates successively smaller increases in output. The optimal result -- sometimes referred to as the optimal level -- is the ideal production rate, where the maximum amount of output per unit of input...
Month: June 2022
Law of Diminishing Returns Explained With Diagram
The law assumes that the output of the production process can be measured or quantified in physical units, such as kilograms, liters or number of units. The optimum level of production is only achieved by a delicate balance of all the factors of production. However, the fact that not all...