diminishing returns, law of

An economic law propounded by David Ricardo, also called the law of diminishing marginal returns. It expresses a relationship between input and output, stating that adding units of any one input (labor, capital, etc.) to fixed amounts of the others will yield successively smaller increments of output.

Note

In common usage, the “point of diminishing returns” is a supposed point at which additional effort or investment in a given endeavor will not yield correspondingly increasing results.