Consider the following statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain using a diagram.

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Diminishing returns is a term used in reference to a reduction in a factor of production and the associated reduction in its marginal production even as the factor in question increases.

According to Colander, this statement is true because it reaches a point of efficiency where all factors of production achieve maximum output, but beyond such a limit, the output starts to decrease. With time, the various factors of production of a firm increase. Holding everything else constant, in the beginning, the resultant increase in output could be greater than the rise in the input. Later, the output will increase in the same proportion as input. Ultimately, the output will increase less proportionately than input under the law of diminishing return to scale.

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Academic.Tips. (2022) 'Consider the following statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain using a diagram'. 20 July.

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Academic.Tips. (2022, July 20). Consider the following statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain using a diagram. https://academic.tips/question/consider-the-following-statement-total-output-starts-falling-when-diminishing-returns-occur-do-you-agree-or-disagree-explain-using-a-diagram/

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Academic.Tips. 2022. "Consider the following statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain using a diagram." July 20, 2022. https://academic.tips/question/consider-the-following-statement-total-output-starts-falling-when-diminishing-returns-occur-do-you-agree-or-disagree-explain-using-a-diagram/.

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Academic.Tips. "Consider the following statement: “Total output starts falling when diminishing returns occur”. Do you agree or disagree? Explain using a diagram." July 20, 2022. https://academic.tips/question/consider-the-following-statement-total-output-starts-falling-when-diminishing-returns-occur-do-you-agree-or-disagree-explain-using-a-diagram/.

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