Law of Diminishing Returns
EconomicsDecision MakingEfficiency
The Law of Diminishing Returns states that adding more resources to a process eventually results in lower incremental output.
Introduction
The Law of Diminishing Returns states that adding more resources to a process eventually results in lower incremental output.
Core Concepts
- Optimal Allocation: Balance resource investment for maximum efficiency.
- Decreasing Marginal Gains: Recognize when additional input yields minimal results.
- Practical Application: Optimize efforts for sustainable outcomes.
Applications
- Business operations to manage resource allocation.
- Agricultural production for optimizing input levels.
Related Resources
- Tools: Economic modeling software.
- Book: "Principles of Economics" by Alfred Marshall.