diminishing marginal returns

Diminishing marginal returns is an economic principle that states that as more of a resource is devoted to the production of a good or service, the lower the marginal benefit that the resource will provide. This principle states that, eventually, the returns will diminish, meaning that the additional benefit provided by each additional resource is smaller than the benefit provided by the previous resource. This is an important economic concept because it explains why it sometimes isn't worth it to continue spending resources to produce something, as more resources will result in a lower rate of return.