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diseconomies of scale I guess means as you produce more it becomes more expensive to prduce. For example you produce output 1 for $2 but output 2 for $5 thus the second one required $3 now lets say input for ouptut 1 had to be doubled for input 2. one land gave output 1. Output 2 needed 2 land.Then there is not diminishing returns. But as second land was costing $3 there was diseconomies of scale.
Wiki User
∙ 15y ago
Wiki User
∙ 13y agoWhat Does Law of Diminishing Marginal ReturnsMean?
A law of economics stating that, as the number of new employees increases, the marginal product of an additional employee will at some point be less than the marginal product of the previous employee.
Investopedia explains Law of Diminishing Marginal Returns
Consider a factory that employs laborers to produce its product. If all other factors of production remain constant, at some point each additional laborer will provide less output than the previous laborer. At this point, each additional employee provides less and less return. If new employees are constantly added, the plant will eventually become so crowded that additional workers actually decrease the efficiency of the other workers, decreasing the production of the factory.
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What war the 3 stages of production?
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
What is the difference between diminishing returns and diseconomies of scale?
The principle of diminishing marginal returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Diseconomies of scale or decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
What is a level of production in which the marginal production decrease with new investment?
diminishing marginal returns
What circumstances cause a firm to experience diminishing marginal returns?
As the number of new employees increases the marginal product of an additional employee will be less than the previous employee which can cause a firm to experience diminishing marginal returns.
What are the stages of production of a firm?
a]increasing marginal returns b]diminishing returns c]negative returns
What war the 3 stages of production?
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
What is the difference between diminishing returns and diseconomies of scale?
The principle of diminishing marginal returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Diseconomies of scale or decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
What is a level of production in which the marginal production decreases with new investment?
diminishing marginal returns
What is a level of production in which the marginal production decrease with new investment?
diminishing marginal returns
What circumstances cause a firm to experience diminishing marginal returns?
As the number of new employees increases the marginal product of an additional employee will be less than the previous employee which can cause a firm to experience diminishing marginal returns.
What are the stages of production of a firm?
a]increasing marginal returns b]diminishing returns c]negative returns
Rns to scale?
The principle of diminishing marginal returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
Distinguish between law of diminishing returns and laws of returns to scale?
The principle of diminishing returns to inputs is when more on one input is added, while other inputs are held constant, the marginal product of the input diminishes. Decreasing returns to scale is when the a firm doubles its inputs, output increases by less than double. With diminishing returns, only one input is being changed while holding the other is fixed. But for decreasing returns, both inputs may change
Why do firms experience increasing marginal returns and then diminishing marginal returns?
The short answer would be supply and demand. As demand for the firms increase, they will experience increasing returns. Likewise, as demand decreases, so do their returns.
Why law of diminishing returns and return to scale might use in understanding the output decisions of firms in different industries?
show with example that if the marginal product is always decreasing the average product is always above the marginal product?
Why is the production possibility curve bowed out from the origin of the curve?
Diminishing Marginal returns to capital and labor.
What is the law of diminishing returns?
the law of diminishing returns states that as a set of variable factors is added to a set of fixed factor, the marginal product and average product will first increase then eventually decrease
