diminishing returns, law of

diminishing returns, law of definition

An economic law propounded by David Ricardo, also called the law of diminishing marginal returns. It expresses a relationship between input and output, stating that adding units of any one input (labor, capital, etc.) to fixed amounts of the others will yield successively smaller increments of output.

Note: In common usage, the “point of diminishing returns” is a supposed point at which additional effort or investment in a given endeavor will not yield correspondingly increasing results.