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Diminishing marginal returns consist of the inevitable point beyond which additions of a variable factor (input) will yield diminishing marginal returns (output) per unit of the variable factor. All other factors of production are held fixed for this analysis.

The principle of '''diminishing marginal returns''' states that [[production system]]s have a point beyond which each additional unit of [[input]] will yield less and less additional [[output]]. All other factors of production are held fixed for this analysis.

 

Note that at first there may be increasing marginal returns, and this principle about diminishing marginal returns expresses what will be inevitably reached.

[[Category:Economics]]

[[Category:Economics]]