Economics Marginal Utility Questions Medium
The law of diminishing marginal product states that as additional units of a variable input are added to a fixed input, the marginal product of the variable input will eventually decrease. In other words, as more and more units of a variable input are employed in the production process, the increase in output resulting from each additional unit of the variable input will become smaller and smaller. This occurs due to factors such as limited resources, diminishing returns, and the fixed capacity of the fixed input. As a result, the law of diminishing marginal product highlights the concept that there is a point at which adding more of a variable input will not lead to proportional increases in output, and may even result in a decrease in productivity.