<p>Marginal product can be constant, increasing or diminishing depending on Returns to Scale (also called Economies of scale). If Returns to Scale is constant, it means that each extra unit of product/output takes one extra unit of input. In this case, marginal product will be constant. In other words, the efficiency of production is constant.</p>

<p>However, take the case of increasing Returns to Scale, which is usually seen in the real world in a typical factory. In this case, one extra unit of product takes less than one extra quantum of cost inputs. In such a case, the firm has high fixed costs as compared to variable costs and said to possess an operating leverage (in financial terms). And, the efficiency of production increases. Same inputs produce higher outputs.</p>

<p><strong>Example</strong>: a software company selling products has high fixed costs and close to zero variable costs. So, selling one extra copy of software can happen at a much lower increase in inputs. This is however, till you reach the ceiling where you have to employ additional fixed cost resources to generate the next item of product. Say, when the next version/iteration of the software has to be produced, it would need additional fixed cost resources to develop it.</p>

<p>So, yes it isn't necessary that marginal product will always have a diminishing curve.</p>

CC BY-SA 4.0
2018-10-15T12:05:50.427Z
2018-10-15T19:02:08.457Z
2018-10-15T19:02:08.457Z
Abhishek Bhattacharya
<blockquote>
  <p>Shouldn't it be easier to produce more quantity of goods for a
  producer?</p>
</blockquote>

<p>No. At some point, staff is overworked and machines overheat. Even if it were indefinitely easier to increase the quantity of goods produced, nothing guarantees that there will be demand for the entire production. </p>

<p>Additionally, progressive taxation, and oversupply of goods have a detrimental effect on producer's profit. These factors are not strictly related to ease of production, but to your question as to </p>

<blockquote>
  <p>Why is the law of diminishing marginal returns justified?</p>
</blockquote>

<p>Furthermore, the sole fact that consumers experience a diminishing marginal utility precludes the possibility that a producer will be able to sell its entire production no matter how much he raises his levels of output.</p>

CC BY-SA 4.0
2018-08-14T17:12:16.223Z
2018-08-14T17:12:16.223Z
Iñaki Viggers
<p><a href="https://www.britannica.com/topic/diminishing-returns" rel="nofollow noreferrer">Diminishing return</a></p>

<blockquote>
  <p>Diminishing returns, also called law of diminishing returns or
  principle of diminishing marginal productivity, economic law stating
  that if one input in the production of a commodity is increased while
  all other inputs are held fixed, a point will eventually be reached at
  which additions of the input yield progressively smaller, or
  diminishing, increases in output.</p>
</blockquote>

<p>Produce a <em>bit</em> more may be less cost.  If you increase a single resource at some point you get less productivity per unit.  </p>

<p>Long term if the whole process is designed to produce more then cost per item should go down. </p>

CC BY-SA 4.0
2018-09-14T19:12:08.653Z
This answer starts well by giving a statement of the law of diminishing returns, including the key point that it relates to the effect of increasing one input while holding all others fixed.  It would be helpful to expand and clarify the remainder, eg when you say "the whole process is designed to produce more" are you making a contrast with a situation in which all inputs are free to vary?
Adam Bailey
CC BY-SA 4.0
2018-08-15T16:06:05.163Z
2018-08-15T16:06:05.163Z
paparazzo
<p>Shouldn't it be easier to produce more quantity of goods for a producer?
Isn't it the case that the ease of production is inherently tied to the quantity you produce?
Shouldn't it be the case that the more you produce , the more easier it becomes to produce a bit more?
I understand why the marginal cost drops for lower quantities but am not sure why it should steadily climb up if the quantity crosses some threshold.</p>

<p>Of course , the fixed costs and variable costs as a result of increase in quantities produced could play a local effect in the increasing marginal cost but I don't see why in general the marginal cost curve seems to be increasing by the argument that it should be easier to produce a bit more when you are already producing a lot.</p>

CC BY-SA 4.0
2018-08-15T15:46:41.383Z
Will adding another spoon to the kitchen make the chef make more soup? Adding that additional spoon will most likely only result in a lower total return. Adding a giant pot to the kitchen might make the chef able to make more soup at a time, but perhaps the stove cannot heat it up resulting in it take longer to heat one giant pot compared to two smaller ones.
ssn
<macroeconomics>
Why is the law of diminishing marginal returns justified?
Haskar P
# Why is the law of diminishing marginal returns justified?

(Asked by: username_0 on 2018-08-14)

Shouldn't it be easier to produce more quantity of goods for a producer?
Isn't it the case that the ease of production is inherently tied to the quantity you produce?
Shouldn't it be the case that the more you produce , the more easier it becomes to produce a bit more?
I understand why the marginal cost drops for lower quantities but am not sure why it should steadily climb up if the quantity crosses some threshold.

Of course , the fixed costs and variable costs as a result of increase in quantities produced could play a local effect in the increasing marginal cost but I don't see why in general the marginal cost curve seems to be increasing by the argument that it should be easier to produce a bit more when you are already producing a lot.

**Tags:** macroeconomics
> **Comments:**
> **username_1**: Will adding another spoon to the kitchen make the chef make more soup? Adding that additional spoon will most likely only result in a lower total return. Adding a giant pot to the kitchen might make the chef able to make more soup at a time, but perhaps the stove cannot heat it up resulting in it take longer to heat one giant pot compared to two smaller ones.  

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## 3 answers

### Answer by username_2 on 2018-10-15. Score: 2

Marginal product can be constant, increasing or diminishing depending on Returns to Scale (also called Economies of scale). If Returns to Scale is constant, it means that each extra unit of product/output takes one extra unit of input. In this case, marginal product will be constant. In other words, the efficiency of production is constant.

However, take the case of increasing Returns to Scale, which is usually seen in the real world in a typical factory. In this case, one extra unit of product takes less than one extra quantum of cost inputs. In such a case, the firm has high fixed costs as compared to variable costs and said to possess an operating leverage (in financial terms). And, the efficiency of production increases. Same inputs produce higher outputs.

**Example**: a software company selling products has high fixed costs and close to zero variable costs. So, selling one extra copy of software can happen at a much lower increase in inputs. This is however, till you reach the ceiling where you have to employ additional fixed cost resources to generate the next item of product. Say, when the next version/iteration of the software has to be produced, it would need additional fixed cost resources to develop it.

So, yes it isn't necessary that marginal product will always have a diminishing curve.


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### Answer by username_3 on 2018-08-14. Score: 0

> Shouldn't it be easier to produce more quantity of goods for a
> producer?

No. At some point, staff is overworked and machines overheat. Even if it were indefinitely easier to increase the quantity of goods produced, nothing guarantees that there will be demand for the entire production.

Additionally, progressive taxation, and oversupply of goods have a detrimental effect on producer's profit. These factors are not strictly related to ease of production, but to your question as to

> Why is the law of diminishing marginal returns justified?

Furthermore, the sole fact that consumers experience a diminishing marginal utility precludes the possibility that a producer will be able to sell its entire production no matter how much he raises his levels of output.


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### Answer by username_4 on 2018-08-15. Score: 0

[Diminishing return](https://www.britannica.com/topic/diminishing-returns)

> Diminishing returns, also called law of diminishing returns or
> principle of diminishing marginal productivity, economic law stating
> that if one input in the production of a commodity is increased while
> all other inputs are held fixed, a point will eventually be reached at
> which additions of the input yield progressively smaller, or
> diminishing, increases in output.

Produce a *bit* more may be less cost. If you increase a single resource at some point you get less productivity per unit.

Long term if the whole process is designed to produce more then cost per item should go down.

> **Comments:**
> **username_5**: This answer starts well by giving a statement of the law of diminishing returns, including the key point that it relates to the effect of increasing one input while holding all others fixed.  It would be helpful to expand and clarify the remainder, eg when you say "the whole process is designed to produce more" are you making a contrast with a situation in which all inputs are free to vary?  

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