<Ul> <Li> </Li> <Li> </Li> <Li> </Li> </Ul> <P> In economics, diminishing returns is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant . </P> <P> The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant ("ceteris paribus"), will at some point yield lower incremental per - unit returns . The law of diminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns, though in fact this is common . </P> <P> A common example is adding more people to a job, such as the assembly of a car on a factory floor . At some point, adding more workers causes problems such as workers getting in each other's way or frequently finding themselves waiting for access to a part . In all of these processes, producing one more unit of output per unit of time will eventually cost increasingly more due to inputs being used less effectively . Another well - studied example is throwing more headcount at software development, yielding Brooks's law . </P>

What is meant by law of diminishing returns
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