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Definition and example of the Law of Diminishing Returns

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The following table gives total output or total product as a function of labor units used.

LABOR TOTAL OUTPUT
0 0
1 5
2 9
3 12
4 14
5 15

a) Define diminishing returns.
b) Does the table indicate a situation of diminishing returns? Explain.

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Solution Preview

a) The Law of Diminishing Returns states that as more units of one input are added, with ...

Solution Summary

What are diminishing returns? Is the given data an example of diminishing returns? How do we make that determination?

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