diminishing returns, law of
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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.
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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.
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The New Dictionary of Cultural Literacy, Third Edition Copyright © 2005 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.