Diminishing returns
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![As labor usage increases from L1 to L2, total output (measured vertically in the top graph) increases by the amount shown. But if labor usage is increased by the same amount again, output goes up by less, implying diminishing marginal returns to the use of labor as an input. The marginal product of labor (measured vertically in the bottom graph) is diminishing everywhere to the right of point A.](/Images/godic/202501/23/Total,_Average,_and_Marginal_Product0507.gif")
In economics, diminishing returns (also called law of diminishing returns, law of variable proportions, principle of diminishing marginal productivity, or diminishing marginal returns) is the decrease in the marginal (incremental) output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.