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| 1. |
What is law of diminishing marginal product? |
| Answer» Law of diminishing marginal product or productivity is an economic theory. It proclaims that while increasing one input and maintaining other inputs constant initially helps in increasing the output, a further increase in the input will have a restricted effect and will ultimately have nil consequence or a pessimistic effect on the output.The Law of Diminishing Marginal Productivity helps in understanding why increased manufacturing isn’t always the best way to increase profitability. | |