The law of diminishing returns is an economic concept that states that as more inputs are added to a production process, the resulting increase in output will eventually start to diminish. In other words, after a certain point, each additional unit of input (such as labor or capital) will yield smaller and smaller increases in output. This occurs because there are fixed factors of production and limited resources that can only be utilized to a certain extent. As production approaches the limit of these factors, the efficiency of each additional unit of input decreases, leading to a diminishing return on investment.
