Definition/ Meaning/ Explanation
If one of the factors in the production is increased the output of that product will be marginally decreased because it is being affected by that increment of one factor while keeping all other constant. For example if the machines are increased in a workspace while the workers are constant, it will diminish the variable factor's output.

Diagrams


Originated from/Coined by
Anne Robert Jacques Turgot

Further Reading/ References
https://en.wikipedia.org/wiki/Diminishing_returns

Category: Learning, Thinking        Tags: Law of Diminishing Returns, Mental Models