Law+of+Diminishing+Returns

The law of diminishing returns describes what happens to marginal product over time. It assumes that technology is fixed and that the industry or firm is in the short run. The Law of diminishing marginal returns says that as every unit of resource is added to a fixed source, after some point the marginal, or product that can be added to each unit of the variable resource will decline. An example of this would be a farmer. Pretend the farmer has a fixed resource of 100 acres planted in beans. If he doesn't cultivate it once, he will produce 50 bushels per acre. If he cultivates once, output rises to 60 bushels per acre, then 75 bushels per acre if he cultivates twice, and 80 if he does three times. Each time after this the marginal return becomes less and less to the total yield as each cultivation doesn't add that many extra bushels. ** These two graphs illustrate the basic idea of the law of diminishing returns. As output increases, there is a point at which the total product is no longer efficient in relation to how much is being produced for the cost(top figure), This means that the marginal product increases for a while, peaks, and then descends as the product costs more than is efficient for the output.
 * Law Of Diminishing Returns**
 * Illustration of the Law of Diminishing Returns

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 * Video**

[|Explaining Diminishing Return]s [|Article and Example of Law] [|Definition of the Law of Diminishing Returns]
 * Additional Information about the Law of Diminishing Marginal Returns**

At some point each additional unit of variable input yields less and less __ [|A) marginal output] [|B) input] [|C) output] [|D) something]
 * Sample Question**