Law of diminishing return

LAW OF DIMINISHING RETURN

 

Law of diminishing return  also known as law of diminishing marginal return  states   that at  

some time,adding an additional factor of  production results in smaller increases in output.

As the input increases (while the other input remain fixed) a point will eventually be reached at which the resulting additions to output decreases.

so,basically there are three stages of law of diminishing return and the stages are as follows :

1) When the total product and average product increases , marginal product is first increasing and then decreasing. 

2) when total product is increasing , average product and marginal product both decreases.

3) when total is diminishing ,average product is decreasing and marginal is negative.

thus, Law of diminishing return applies in the short run because in the long run  all the factors are variable.