Law of Diminishing Returns
In some cases the return due to each successive additional unit, the
production goes on diminishing. It is known as Diminishing Returns and is
further explained by the Law of Diminishing Returns.
This law is one of the most fundamental law of Economics. Usually it is
related with agriculture and was also first enumerated by a Scottish
Usually an increase in any of the factor of production results in an increase
in production but this change is a proportionate change. It means that if
the quantity of land and labour is doubled, although there will be an
increase in the production but it will not be doubled. And that is what Law
of Diminishing Returns states. In the words of Marshall:
“An increase in the capital and labour applies in the cultivation of land
causes in general a less than propotionate change or increase in the amount
of production raised. Unless it happens to coincide with an improvement in
the art of agriculture.
Read more: Laws of Returns http://www.friendsmania.net/forum/1st-year-poe-principles-