Law for diminishing marginal returns, Microeconomics

The Law for Diminishing Marginal Returns

67_law of diminishing marginal returns.png

- As use of an input increases in equal increments, a point will be approched at which the resulting additions to output decreases (that is MP declines).

- When labor input is small, MP increases because of specialization.

- When labor input is large, MP decreases because of inefficiencies.

* The Law of Diminishing Marginal Returns

- Can be used for the long run decisions to assess tradeoffs of different plant configurations

- Assumes that the quality of variable input is constant

- Explains declining MP, not essentially a negative one

- Assumes a constant technology

111_law of diminishing marginal returns1.png

Posted Date: 10/10/2012 9:25:24 AM | Location : United States







Related Discussions:- Law for diminishing marginal returns, Assignment Help, Ask Question on Law for diminishing marginal returns, Get Answer, Expert's Help, Law for diminishing marginal returns Discussions

Write discussion on Law for diminishing marginal returns
Your posts are moderated
Related Questions
how can we solve central problems of economy in different econmy?

Risk Premium - The risk premium is amount of money which a risk averse person would pay to keep away from taking a risk. *  Risk Premium: A Scenario - The person has a 5%

all information about demand analysis


what is the profit maximising quantity of L

Why is high unemployment considered a bad thing? High unemployment means that a nation's resources are underutilized.  It also poses great psychological, economic, and social c

Service levels in Supply Chain Management Consider that a finished product is made up of five inventoried component parts. If the service level were 90 per cent or 0.9 for eac

Factors of Production Factors of production are the resources that are utilized to manufacture goods and services: 1. Natural resources: The things developed by acts of n

Labor Productivity  - Labor Productivity and Standard of Living - Consumption can increase if productivity increases. - Determinants of Productivity Stock of capit

Explanation of the Break in Trend: An economy can grow in three different ways or all three ways may work simultaneously:   1)  Horizontally, i.e., it may go on producing m