What are returns to a factor?what do u mean by law of diminishing returns?
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heya fellas........here is ur answer
the law of diminishing returns states that as one input variable is increased there is a point at which the marginal increase in output begins to decrease, holding all inputs constant. at the point where the law sets in, the effectiveness of each additional unit of input decreases.
return to a factor and returns to scale are two important laws of production.
returns to a factor relate to the short period production function when one factor is varied keeping the other factor fixed order to have more output, the marginal returns of variable factor diminish.
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