Point of diminishing marginal returns

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Now applying these definitions to our discussion question, a restaurant owner may consider placing folding tables or outside picnic tables if space permitted in his or her restaurant as a short run solution. Obviously there is only so much that can be accomplished in an existing establishment before the owner reached the point of diminishing marginal returns, or where their output reaches a point where additional tables may cause crowding and profits begin to become smaller. They must then look for long run solutions.

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