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In economics, diminishing returns (also called diminishing marginal returns) is the decrease in the marginal (per-unit) output of a production process as the amount of a single factor of productionis increased, while the amounts of all other factors of production stay constant.
The law of diminishing returns (also law of diminishing marginal returns or law of increasing relative cost) statesthat in all productive processes, adding more of one factor of production, while holding all others constant ("ceteris paribus"), will at some point yield lower per-unit returns.[1] The law ofdiminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns, though in fact this is common.
For example, the use of fertilizerimproves crop production on farms and in gardens; but at some point, adding more and more fertilizer improves the yield less per unit of fertilizer, and excessive quantities can even reduce the yield. Acommon sort of example is adding more workers to a job, such as assembling a car on a factory floor. At some point, adding more workers causes problems such as getting in each other's way, or workersfrequently find themselves waiting for access to a part. In all of these processes, producing one more unit of output per unit of time will eventually cost increasingly more, due to inputs being usedless and less effectively.
The law of diminishing returns is a fundamental principle of economics.[1] It plays a central role in production theory.

Classical economists often used agriculturalexamples of diminishing returns, such as the amount of yield from a fixed area of land in response to inputs like seed or labor.

Seed yield gives diminishing returns to seeds planted in thishypothetical example.[2] The slope of the response curve is continually decreasing.
From ancient times until the Industrial Revolution, crop yields were sometimes expressed as seeds harvested per seed...