Posted by Smokey Stover on June 09, 2006
In Reply to: Point of diminished returns Posted by Daniel J Murphy on June 09, 2006
: I would greatly appreciate it if someone could tell me the meaning of the phrase; "point of diminished returns" Thank you.
" The New Dictionary of Cultural Literacy, Third Edition. 2002.
diminishing returns, law of
An economic law propounded by David Ricardo, also called the law of diminishing marginal returns. It expresses a relationship between input and output, stating that adding units of any one input (labor, capital, etc.) to fixed amounts of the others will yield successively smaller increments of output. 1
In common usage, the "point of diminishing returns" is a supposed point at which additional effort or investment in a given endeavor will not yield correspondingly increasing results."
So when you have reached that point, it's better to give up the endeavor, unless you have some non-economic interest being served by your efforts or are willing to accept the status quo in terms of return on investment. SS