the law of diminishing returns


Also found in: Dictionary, Thesaurus, Legal.

the law of diminishing returns

1. In economics, the law that a yield rate (i.e., of profits, production, benefits, etc.) will eventually fail to grow in proportion to the amount of investment, skill, time, or effort that is added. The restaurant, to combat high volumes of customers, hired a large surplus of wait staff and cooks. The law of diminishing returns kicked in, however, as the overcrowded staff was far less efficient and eventually cost the restaurant more in wages than it was earning.
2. By extension, the idea that any output or results (e.g., of a product, project, organization, etc.) will eventually begin to fail increasing proportionally to additional time, money, skill, or effort. Unfortunately, the show's charm has not lasted, with increasingly zany plots and more characters than one can keep track of. That's just the law of diminishing returns, unfortunately. Schools feel like they have to pile on homework so students meet increasingly high targets for standardized tests, but then you rub up against the law of diminishing returns, because students can only handle so much work before they begin to burn out and perform poorly anyway.
See also: diminish, law, of, return

the law of diminishing returns

used to refer to the point at which the level of profits or benefits to be gained is reduced to less than the amount of money or energy invested.
This expression originated in the early 19th century with reference to the profits from agriculture.
See also: diminish, law, of, return
References in periodicals archive ?
While the law of diminishing returns influences all markets there are four levels of saturation within the maturity stage (see Chart 2).
Big booths are impressive, but the law of diminishing returns will apply.
Its very thoroughness -even the textual variants in reprints of early reviews are catalogued, and the editor's long introduction duplicates much of the material included in other sections-generates inflation, and the law of diminishing returns sets in: the sheer length of the work, with its large pages and small print, will render its most valuable elements difficult of access to all but the most assiduous readers.
EVIDENCE of the law of diminishing returns has been revealed to Mr Brocklebank.
What more can their players prove this campaign before the law of diminishing returns kicks in?
Recyclers of industrial and commercial streams, who think as business owners first and foremost, would be quick to explain the law of diminishing returns when chasing secondary commodities: Don't expend a lot of energy and time for a quantity of material that doesn't justify the expense.
Similarly, 1997's Batman & Robin, the last installment in a series that demonstrates the law of diminishing returns better than most economic textbooks could ever hope to, managed to turn away the masses far more effectively than Fredric Wertham's homophobic declamations in Seduction of the Innocent.
After that, the energy begins to fade and the law of diminishing returns sets in.
Innovation matters so much because it affords the economy a way of escaping the law of diminishing returns that otherwise would inexorably reduce the punch from simply adding more capital or labor.
Boer shows how to recognize the signs of value destruction and use innovation to overcome the law of diminishing returns. Readers will learn how the management of systematic (market) risk requires different techniques--and provides different opportunities--than the management of unique (private) risk (see "Valuation of Technology Using `Real Options'," RTM, July-August 2000, pp.
Others followed what he calls the law of diminishing returns. Then there were the ones he simply rejected as a matter of prudence--for fear of alarming the building inspector.
Secondly, there is massive evidence that science is subjected to the law of diminishing returns, cast in the known rule "first dollars (read: smaller grants) are the most cost-effective."
Possible gains in both areas are limited by the law of diminishing returns. Most insurers that have invested in loss control find at some stage that an additional dollar spent no longer leads to a dollar or more saved.
Although the law of diminishing returns is hard at work here, there is no denying that this is a truly excellent cartridge for those who insist in the very best and have a budget that allows for shameless extravagance every once in a while.
This is because the belief exists at most companies that significant inefficiencies have been purged from their systems and that further economies should be subject to the Law of Diminishing Returns. Further, the Gospel du Jour states that the road to competitive advantage and market leadership runs through The Land of Increased Sales.