Law of Diminishing Returns
Definition
Holding all inputs fixed but one, output rises but by ever-smaller increments. Drives the upward-sloping marginal-cost curve.
Example
Adding a tenth chef to a small kitchen barely raises output — too many cooks.
Holding all inputs fixed but one, output rises but by ever-smaller increments. Drives the upward-sloping marginal-cost curve.
Adding a tenth chef to a small kitchen barely raises output — too many cooks.