Diminishing returns to scale

By:
Updated: Aug 20, 2021

When the marginal product of a factor falls as more of that factor is used holding the quantity of other factors constant. This should be contrasted with decreasing returns to scale, which involve a simultaneous increase in the use of all factors of production.

Reference: Oxford Press Dictonary of Economics, 5th edt.



Sources & references
Risk disclaimer
James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.