- The tendency for a continuing application of effort or skill toward a particular project or goal to decline in effectiveness after a certain level of results has been achieved.
- A law affirming that to continue after a certain level of performance has been reached will result in a decline in effectiveness.
- An economic law stating that if one input in the production of a commodity is increased while all other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.
Tuesday, March 24, 2015
The Law of Diminishing Returns
THE LAW OF DIMINISHING RETURNS
by Antonio C. Antonio
March 16, 2015
If the input of one resource is increased by equal increments per unit of time while the quantities of other inputs are held constant, there will be some point beyond which the marginal physical product of the variable resource will decrease (Leftwich, 1979). To those of us who have no economics background, this definition of the Law of Diminishing Returns is quite technical and, therefore, tough to understand in the mind of an average person.
Let’s try to keep it simple… There are several definitions of the Law of Diminishing Returns:
In the case of the uplands, natural resources needs time to regenerate. Increasing the production output without enhancing the regeneration capability of the land will eventually not be sustainable. The Law of Diminishing Returns only applies to renewable resources under the ambit of sustainable development.
The accompanying photo in this article is a graphic illustration of the Law of Diminishing Returns.
Just my little thoughts…
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