FREE Law OF Diminishing Returns Essay - ExampleEssays.

The law of diminishing returns says that each time we do something to receive a benefit, the benefit will be less and less. The best way to think of this is by a simple example. If we are with a small child on a hot summer day and we pass an ice cream stand and buy the child an ice cream cone, it will taste wonderful.

The Law of Diminishing Returns - Law of diminishing returns When increasing amounts of one factor of production are employed in production by fixing some other production factor, after some level, the resulting increases in output of product become lower and lower.

The law of diminishing returns is a key one in economics When marginal costs increase, it means that when a firm very large, the cost also rise at the same time and it the difficult of organisation. When marginal costs increase, it means that when a firm very large, the cost also rise at the same time and it the difficult of organisation.

The law of diminishing returns can be illustrated with the help of a table 2 and a Figure 2. It is seen from the table that the producer is employing different units of labour and capital in the cultivation of land.

The law of diminishing returns is described by different economists in different ways, which are as follows: ADVERTISEMENTS: According to G. Stigler, “As equal increments of one input are added; the inputs of other productive services being held, constant, beyond a certain point the resulting increments of product will decrease, i.e., the marginal product will diminish.”.

Defining the Law of Diminishing Returns The hypothesis underlying the law of diminishing returns is that: if one factor of production is increased by small, constant amounts while all other factor quantities are held constant, then after some point the resulting increases in output become smaller and smaller.

The Law Of Diminishing Returns Essay 1632 Words 7 Pages Hirschey(2009) explains the law of diminishing returns “As the quantity of a variable input increases, with the quantities of all other factors being held constant, the resulting increase in output eventually diminishes (Hirschey, 2009, pg.253).

The law of diminishing returns is also referred to as the law of diminishing marginal returns. It implies that an increase in one input does not necessarily increase the amount of returns proportionally, in case when all other factors are held constant (Rasmussen, 2010). It applies to cases where a firm has both variable and fixed inputs.

Essays on Law Diminishing Returns. Law Diminishing Returns Search. Search Results. Economic Growth A fall in this price means that more will be used since the law of diminishing returns implies that greater use of this input will imply a lower marginal product. 19175 Words; 77 Pages.

The law of diminishing returns is also called the law of variable proportion, as the proportions of each factor of production employed keep changing as more of one factor is added. In a factory, the factor of production most easily varied is labour. Thus when the factory needs to increase output quickly it is likely to take on more workers.

Law of Diminishing Returns The Law of diminishing returns is a key one in economics. It is used to explain many of the ways the economy works and changes. It is a relatively simple idea; spending and investing more and more in a product where one of the factors of production remains the same means the enterprise will eventually run out of steam.