You are here

Law of Diminishing Returns & Returns to Scale

Quick revise

The law of diminishing returns says that as we add more units of a variable output to factors of production then output will initially rise and then fall

Diminishing returns occur when marginal revenue starts to fall as each extra worker is adding less to total revenue

PLEASE LOG IN OR REGISTER TO REMOVE THIS ADVERT

PLEASE LOG IN OR REGISTER TO REMOVE THIS ADVERT