In Reply to: your graph is wrong posted by Joe Murphy Jr on June 12, 2012 at 20:46:33:
>Instead, your graph shows negative gain after the X point (ie, things get worse after a certain input).<
Negative gain per dollar after the X point for sure. Things get worse per dollar spent, after a certain point. It does not mean there is no improvement, it means there is less improvement on the next dollar spent as compared to the previous dollar spent.
The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant, will at some point yield lower per-unit returns. The law of diminishing returns does not imply that adding more of a factor will decrease the total production, a condition known as negative returns.
A consequence of diminishing marginal returns is that as total investment increases, the total return on investment as a proportion of the total investment (the average product or return) decreases.
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Hide it ~ nothing looks better..
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Follow Ups
- RE: your graph is wrong - Sumflow 22:04:58 06/12/12 (4)
- perhaps we're discussing different subjects - Joe Murphy Jr 15:50:13 06/13/12 (3)
- RE: perhaps - Sumflow 16:05:49 06/13/12 (2)
- RE: perhaps .. - Sumflow 16:09:40 06/13/12 (1)
- we are in agreement on both counts [nt] - Joe Murphy Jr 21:30:26 06/13/12 (0)