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study › academy › answer The principle of diminishing returns doesn't apply to labor

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Diminishing Returns Many economic principles have been around for years. They have stood the test of time to various degrees, but overall they still hold true even when modern production techniques and skills are factored into them. One of these principles of ‘diminishing returns’ has been stretched a little but still remains true to this day.The law of diminishing returns is the concept that, in a production processes, there is a point where an increase in inputs causes outputs to decrease rather than increase. Learn the definition of.The law of diminishing returns (also known as the law of diminishing marginal productivity) states that in productive processes, increasing a factor of production by one unit, while holding all others production factors constant, will at some point return a lower unit of output per incremental unit of input.Key Takeaways The law of diminishing marginal returns states that adding an additional factor of production results in smallerAfter some optimal level of capacity utilization, the addition of any larger amounts of a factor of production willFor example, if a factory employs workers to. The principle of diminishing returns.

en.wikipedia.org › wiki › Diminishing_returns Diminishing returns - Wikipedia

  1. corporatefinanceinstitute › resources Law of Diminishing Returns & Point of Diminishing Returns
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