When additions of input to a fixed quantity of another input lead to progressively smaller increases in output,we say we are facing

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Quizplus · Accepted Answer

Diminishing returns occur when the addition of one input, while holding all other inputs constant, leads to smaller increases in output. In other words, the more units of a variable input (like labor) are added to a fixed quantity of another input (like land or capital), the lower the marginal product of the variable input will be. This can be due to limitations in the amount of the fixed input, such as only having a certain amount of land to work with, or due to inefficiencies in the production process.

When Additions of Input to a Fixed Quantity of Another