diminishing marginal returns


phenomenon in which greater input of effort, money, etc. yields smaller results. crucial part of the idea is that if you’re using x to get y results (where y is the thing you want). then additional input a will yield additional results b, but not in the same proportion as before.

on average, before, you put in x to get y, so your yield was y/x. but if you increase x by amount a, then your results will be y + b, where

(y + b)/(x + a) < y/x and this will only get worse. diminishing marginal returns (dmr) is used to explain why the supply curve in economics slopes upward, i.e., increasing the quant-ty supplied requires an increased price of most things. sometimes dmr is more than offset by "economies of scale," which allows more of a thing to be supplied more cheaply than a small amount. at first his flowers and treats swept her off her feet, but then he had to do more and more lavish things to please her. it was a cl-ssic case of diminishing marginal returns.

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