The law of diminishing returns can explain why:

Question

Quizplus · Accepted Answer

The law of diminishing returns states that as more of a variable input (like labor) is added to a fixed input (like capital or land), the additional output produced from each new unit of the variable input will eventually decrease. This principle explains why marginal cost—the cost of producing one more unit of output—eventually increases in the short run as production is ramped up. This is because, beyond a certain point, the efficiency of production decreases as resources are stretched thinner, leading to higher costs for additional output.

The Law of Diminishing Returns Can Explain Why