The law of diminishing marginal returns:

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The Law of Diminishing Marginal Returns states that as more of a factor input is added to a production process, the extra output resulting from each additional unit of input will eventually start to decline. In other words, each additional unit of a factor input added to a production process will yield a smaller and smaller increase in the output. The law of diminishing marginal returns usually kicks in when a business is unable to adjust fixed factors of production, like capital and labor, and variable factors have been increased up to the maximum level. This is because the productivity of the variable factor in relation to the fixed factor starts declining. As a result, the overall productivity of the production process also starts to decline.

Answered by carlos04

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