Diminishing marginal returns Definition| Urban Word Dictionary

Diminishing marginal returns

phenomenon in which greater input of effort, money, etc. yields smaller results. Crucial part of the idea is that if you're using x to get y results (where y is the thing you want). then additional input a will yield additional results b, but not in the same proportion as before.On average, before, you put in x to get y, so your yield was y/x. But if you increase x by amount a, then your results will be y + b, where(y + b)/(x + a) < y/xand this will only get worse.Diminishing marginal returns (DMR) is used to explain why the supply curve in economics slopes upward, i.e., increasing the quantity supplied requires an increased price of most things.Sometimes DMR is more than offset by "economies of scale," which allows more of a thing to be supplied more cheaply than a small amount.

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