Diminishing Return

Diminishing Return. We can summarise the possible effects of increasing the quantity of a variable factor as follows. Diminishing returns also called law of diminishing returns or principle of diminishing marginal productivity economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed a point will eventually be reached at which additions of the input yield progressively smaller or diminishing increases in output.

As diminishing returns set in on any given marketing tactic revenues will exceed costs by less and less. The law of diminishing returns can be illustrated with the help of a table 2 and a Figure 2. Benefits that beyond a certain point fail to increase in proportion to extended efforts.

A rate of yield that beyond a certain point fails to increase in proportion to additional investments of labor or capital.

A Law of Diminishing Returns. Definition of diminishing returns from the Cambridge Business English Dictionary Cambridge University Press. As your results get better you need to put in more energy to improve results further. Diminishing returns occur in the short run when one factor is fixed eg.