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Productivity
Causes & Prevention + Tools To Increase Marginal Productivity
The law of diminishing marginal productivity is an essential economic principle that states that as more units of a good or service are produced, the marginal (additional) output from each unit decreases. In other words, each additional input unit (labor, for example) yields less and less work.
This principle is often illustrated with a graph, which shows how output (in this case, a quantity of widgets produced) declines as more and more labor.
At some point, adding more labor will produce less output. This is the point at which diminishing marginal productivity occurs.
Causes of diminishing marginal productivity
There are several reasons why marginal productivity may diminish over time. In some cases, the individual may become less productive as they age. In other cases, the individual may lose knowledge or skills once essential to their work. Finally, the individual may need help to adapt to changes in the market or how their work is done.
There are a few other possible explanations:
