The law of diminishing marginal returns is the same as increasing returns to scale.

Question

Quizplus · Accepted Answer

The law of diminishing marginal returns refers to a situation in which adding more units of a factor of production (such as labor) to a fixed amount of other factors of production (such as capital) will eventually result in smaller and smaller increases in output. Increasing returns to scale, on the other hand, refers to a situation in which increasing all factors of production by the same proportion (such as doubling all inputs) results in more than proportionate increases in output. Therefore, these two concepts are opposite in nature.

The Law of Diminishing Marginal Returns Is the Same as Increasing