In economics, the ‘Law of Diminishing Return’ states that as the marginal output from a production process increases, it becomes smaller. When other factors are kept equal, however, this principle holds true. In business, this law can be applied to many aspects of the production process. This article explains the law and how it was originally defined. You may also be interested in how technology impacts this economic principle. Law of Diminishing Returns The Law of Diminishing Returns, originally from economics, states that as the amount of one factor of production increases, so does the amount of the other factors. …
