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    Law of Diminishing Arginal Productivity

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    What is the relationship between the number of inputs and the law of diminishing marginal productivity. I guess I actually need a better understanding of the law of diminishing marginal productivity as well.


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    Solution Preview

    The law of diminishing marginal productivity stated that when you keep adding the number of variable inputs to a fixed input, the productivity of your inputs will increase up until a point. After this point the more you add up your variable inputs, productivity will decline or the returns will go down. It is also called law of diminishing returns.

    For example, just imagine that you have a machine. This machine is your fixed input. If you want to make production you need to add variable inputs, let say labor, to run this machine. First, you add one ...

    Solution Summary

    The law of diminishing marginal productivity state that factor productivity will increase by adding up variable inputs into fixed inputs up until a certain point. The law is explained in almost 400 words of detail within.