The Law of Diminishing Returns

A concept in economics that if one factor of production (number of workers, for example) is increased while other factors (machines and workspace, for example) are held constant, the output per unit of the variable factor will eventually diminish.

Although the marginal productivity of the workforce decreases as output increases, diminishing returns do not mean negative returns until (in this example) the number of workers exceeds the available machines or workspace. In everyday experience, this law is expressed as “the gain is not worth the pain.”

The Business Dictionary

The rule of diminishing returns states that if all the factors of an equation remains constant except one, the return decreases as that single factor increases.

A great example of this is productivity decreasing over time. People who regularly work 40 hours a week are more productive in the long run than those who work 60 hours a week. Long hours and leaving work late are nothing to be admired–it just demonstrates an incapability of getting work done effectively and on time.

“Long hours…are often more about proving something to ourselves than actually getting stuff done.” Jessica Stillman, Why Working More than 40 Hours a Week is Useless

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