Many years ago economists pondered over the implication of varying the proportion in which the factors were combined and came up with a principle which has become famous as the Law of Diminishing Returns. They applied this law to agriculture but it holds true for all kinds of production. The operation of the law may be explained by means of [...]
The below mentioned article provides a beginners’ guide to the law of diminishing returns. This article will help you to understand the following things:- 1. Introduction to the Law of Diminishing Returns 2. Definition of the Law of Diminishing Returns 3. Assumptions 4. Causes of the Operation of the Law 5. Importance and Others. Introduction to the Law of Diminishing [...]
Law Of Diminishing Returns: Assumptions, Explanation, Causes, Importance and Limitations! Assumptions: The main assumptions of the law are: 1. No Change in Technology: First of all, the law is based on the assumption that there is no change in the techniques of production. If the techniques of production undergo a change, in that case the efficiency of production would increase. [...]