Explain the law of diminishing marginal returns. – NABTEB QUESTION

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The law of diminishing marginal returns states that if increasing units of variable factors of production are combined with a given quantity of another fixed factor, returns are on the increased up to a point after which the marginal returns falls.

LAND  UNITS OF LABOUR TOTAL OUTPUT MARGINAL OUTPUT AVERAGE OUTPUT
5 Hectares 1 10 10 10
5 Hectares 2 22 12 11
5 Hectares 3 39 17 13
5 Hectares 4 52 13 13
5 Hectares 5 60 8 12
5 Hectares 6 66 7 11

 

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