Diminishing returns,so that each additional hour of labor employed produces successively smaller additional amounts of real GDP,exist because

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Diminishing returns occur because when additional factors of production, in this case labor, are employed, all other factors are held constant. As a result, each additional hour of labor produces successively smaller additional amounts of output. This is due to factors such as limited space, technology, and natural resources, which prevent output from increasing indefinitely with additional inputs of labor.

Diminishing Returns,so That Each Additional Hour of Labor Employed Produces