diminishing returns

[dih-min-ish-ing ri-turnz]

noun

1. any rate of profit, production, benefits, etc., that beyond a certain point fails to increase proportionately with added investment, effort, or skill.

2. Also called law of diminishing returns. Economics.,  the fact, often stated as a law or principle, that when any factor of production, as labor, is increased while other factors, as capital and land, are held constant in amount, the output per unit of the variable factor will eventually diminish.

diminishing returns

plural noun

1. progressively smaller rises in output resulting from the increased application of a variable input, such as labour, to a fixed quantity, as of capital or land

2. the increase in the average cost of production that may arise beyond a certain point as a result of increasing the overall scale of production

Word History and Origins

Origin of diminishing returns¹

First recorded in 1805–15

Example Sentences

Youth unemployment in China remains elevated, and young people frequently report that the cost of education and the intensity of competition deliver diminishing returns.

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“Over-reliance on promotion delivers diminishing returns and erodes brand equity, and that is what has happened here,” Chief Executive Officer Daniel Heaf, a former Nike executive who joined the company in May, said on a call with investors.

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“However, overreliance on promotion delivers diminishing returns and erodes brand equity, and that is what has happened here,” Heaf said, according to a FactSet transcript of the post-earnings call with analysts.

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This well-known phenomenon is referred to as the "law of diminishing returns."

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They pledged to “notably” raise the share of household consumption in the economy, a promise that analysts say is to hedge against a global backlash aimed at a flood of cheap Chinese exports and to make up for diminishing returns from domestic investments.

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