In economics, the principle that adding more of one input eventually produces smaller increases in output, with other inputs fixed, is the law of diminishing returns.
It applies in the short run, when at least one factor of production cannot be changed. For example, adding workers to a fixed-size kitchen may initially raise meal production substantially, but later workers have less space and equipment to use, so each extra worker adds less output than the previous one.
The law does not say that total output immediately falls. It says marginal product—the extra output from one additional unit of input—eventually decreases. Total output can still rise while marginal product is positive, although it rises more slowly.
This idea is different from economies of scale, which examine what happens when all inputs expand together over the long run. The law is associated with classical economic analysis and helps explain why firms balance labor, capital, land, and other productive resources rather than increasing only one input indefinitely.