Question

Write the Law of Diminishing Marginal Productivity.

Hint:

The Law of Diminishing Marginal Productivity explains why increasing one factor of production beyond a point results in reduced efficiency.

Answer 1

The law states that as more units of a variable input (e.g., labor) are added to a fixed input (e.g., capital), the additional output (marginal product) generated from each additional unit of the variable input eventually decreases. This happens due to the limited availability of fixed inputs.