The law of diminishing returns refers to

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The law of diminishing returns states that in the short run, output tends to increase at a decreasing rate as additional inputs are added. This means that at some point, adding more inputs will produce smaller and smaller increases in output, until eventually the output begins to decline. The law applies specifically to situations where at least one input (such as capital or land) is fixed, while other inputs (such as labor or raw materials) are variable. The law of diminishing returns is important for businesses and policymakers to understand, as it impacts decisions about resource allocation, production levels, and efficiency.

The Law of Diminishing Returns Refers to