Law of Diminishing Returns

This refers to the economic principle of Production Theory which states that, at some point, adding an additional unit of production will yield a lower per unit increase in output.

For example, adding additional members of staff to a team will increase the team’s productivity until the point at which they start to get in each other’s way.

Law of Diminishing Returns is a term normally found in economics and financial management; Explore our learning zone to discover more