Which of the following indicates that increasing production will eventually lead to less added output per additional unit of input?

The Law of Diminishing Returns describes a fundamental principle in economics that explains how, as more units of a variable input (like labor or capital) are added to a fixed input (such as land or machinery), the additional output produced from each new unit of input will eventually decrease after a certain point. This means that while initially, adding more input may lead to significantly increased output, over time, the gains from each additional unit start to decline.

For example, a farmer might find that adding more workers to a fixed plot of land increases productivity up to a point, but after a certain threshold, each additional worker contributes less and less to overall production because the land becomes overcrowded or resources are already fully utilized. This concept is crucial for understanding production processes and making efficient resource allocations in various economic contexts.

In contrast, Economies of Scale refer to the cost advantages that businesses experience when production becomes efficient, leading to a reduction in cost per unit as the scale of production increases. Marginal Returns commonly refers to the additional output that results from one additional unit of input, which is related but does not capture the decreasing productivity aspect. Production Efficiency speaks to using resources in the most effective manner possible but does not specifically address the diminishing returns phenomenon.