Law of diminishing return occurs in the short-run when one factor is fixed. If the variable factor of production is increased, there comes a point where it will become less productive and therefore there will eventually be a decreasing marginal and then average product.
Free Example of Law of Diminishing Returns Essay 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).
References Introduction Diminishing returns, also called law of diminishing returns or principle of diminishing marginal productivity, 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.
Another important law in economics is the law of marginal returns or the law of increasing costs”. Discuss in terms of your study in this course, how might you know that you are at a point of diminishing returns, or where more study will not benefit you like it did before?
Qct 3 Global Economics Essay. a. Discussion Questions: 3, 11 and 12. 3. The law of diminishing returns is reflected in the postulates that as we use more and more units of the variable input after that you get the marginal product (diminishing returns) from the variable input.
Importance or significance of the Law of Diminishing Returns: The Law of Diminishing Returns is an important law of Economics. It has several theoretical and practical usages. Its importance is explained as follows: 1) This law is the basis of Malthusian Theory of Population.
In the remainder of this essay I willexamen some of Ricardo's economic theories with a focus on the law of diminishing returns. David Ricardo is responsible for the creation as well as the development of a number ofkey economic theories which allowed past and current economist to better understand todaysever changing economy.
Importance of the Law of Diminishing Returns. We have already quoted Cairnes when he says that in the absence of the law of diminishing returns, “The science of political economy would be as completely revolutionized as if human nature itself were altered.”Such is the great importance of the law of diminishing returns.