The law of diminishing marginal product is a reason why the demand curve for labour is downward sloping.

Question

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The law of diminishing marginal product states that as more units of a variable input (such as labour) are added to a fixed input (such as capital), the additional output produced by each additional unit of the variable input will eventually decrease. This means that at some point, hiring an additional worker will not result in as much additional output as the previous worker did. Thus, the marginal product of labour decreases as more workers are hired. As a result, employers are willing to pay less for each additional worker beyond a certain point, causing the demand curve for labour to be downward sloping.

The Law of Diminishing Marginal Product Is a Reason Why