In the context of resource allocation, what does the term 'diminishing returns'

In the context of resource allocation, what does the term 'diminishing returns' imply?

In the context of resource allocation, what does the term 'diminishing returns' imply?

Step 1: Understand what 'input' means. Input refers to resources used in a process, like labor, materials, or money.
Step 2: Know what 'output' means. Output is the result of using those inputs, like products made or services provided.
Step 3: Learn about 'diminishing returns.' This means that when you keep adding more input, the extra output you get from each additional input will start to decrease.
Step 4: For example, if you have a garden and keep adding more water, at first, your plants grow better. But after a certain point, adding more water helps less and less.
Step 5: Therefore, diminishing returns imply that there is a limit to how much output you can get from increasing input.

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