
Law of diminishing returns
The Law of Diminishing Returns states that as you keep adding more of one resource, like labor or capital, to a fixed amount of another resource, such as land or machinery, the additional output you gain will eventually decrease. For instance, if a farmer adds more workers to a field, initially production may increase significantly. However, after a certain point, each new worker contributes less and less to overall crop yield because the land can only support so many people effectively. This principle highlights the limits of productivity when resources are not balanced.