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No, diminishing returns do not necessarily mean economic inefficiency. By contrast, diminishing returns usually create a condition where a marginal benefit = marginal cost condition is achieved and results in a stable, non-infinite equilibrium. It would be inefficient to produce over or under this equilibrium, but the nature of production functions do not ensure inefficiency.
Wiki User
∙ 12y ago
Wiki User
∙ 11y agoDiminishing return can lead to inefficiency in an economy because when input in an economy is not checkmated, it is bound to culminate into less achievement in its productive sector
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Why law of diminishing returns is considered a short-run phenomenon?
why law of diminishing returns is considered a short-run phenomenon?
What war the 3 stages of production?
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
What are the stages of production of a firm?
a]increasing marginal returns b]diminishing returns c]negative returns
Who is responsible for the law of diminishing returns?
Thomas Malthus
Why isoquants convex to the origin?
law of diminishing returns
Why law of diminishing returns is considered a short-run phenomenon?
why law of diminishing returns is considered a short-run phenomenon?
What war the 3 stages of production?
Three stages of production are increasing marginal returns, diminishing marginal returns, and negative marginal returns.
Are there diminishing returns to risk taking?
No. Fundemantaly returns increase with risk, they do not diminish.
What are the stages of production of a firm?
a]increasing marginal returns b]diminishing returns c]negative returns
Who is responsible for the law diminishing returns?
Thomas Malthus
Who is responsible for the law of diminishing returns?
Thomas Malthus
Definition of overexploitation?
Exploitation to the point of diminishing returns.
What is increasing input with reduced output?
Diminishing returns.
Why isoquants convex to the origin?
law of diminishing returns
What offsets the law diminishing returns?
technical innovation
Who is responsible for law of diminishing returns?
Thomas Malthus
Explain how the diminishing returns influences the shape of the variable cost and total cost curves?
how diminishing returns influences the shapes of the variable-cost and total-cost curves
