Faculties and Departments > Business & Entrepreneurship

Example of diminishing returns:

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Md. Alamgir Hossan:

•   Use of chemical fertilizers. A good example of diminishing returns includes the use of chemical fertilizers- a small quantity leads to a big increase in output. However, increasing its use further may lead to declining Marginal Product (MP) as the efficacy of the chemical declines.



•   Revising into early hours of the morning. If you revise economics for six hours a day, you will improve your knowledge quite a bit. However, if you continue to revise into the early hours of the morning, the amount that you learn increases by only a small amount because you are tired.


•   Employing extra workers. A cafe may wish to serve more customers during the busy summer months. However, employing extra workers may be difficult because of a lack of space in the cafe.

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