please explain the law of diminishing returns
In: Economics
Imagine you have a small garden where you’re planting strawberries. At first, when you add a little bit of water and fertilizer, your strawberries grow a lot and you get a big bunch of them. You’re happy because your hard work is paying off!
But then, you think, “If a little bit of water and fertilizer makes my strawberries grow this much, what if I add even more?” So you keep adding more and more, expecting to get more strawberries each time.
At first, it does work, and you get more strawberries. But after a certain point, adding more water and fertilizer doesn’t make much difference. You add a lot more, but only get a few extra strawberries. That’s because the plants can only use so much water and fertilizer effectively; after that, it’s just too much for them.
The law of diminishing returns is like this: when you keep adding more of something (like water and fertilizer) to help improve something else (like the number of strawberries you get), there comes a point where adding more doesn’t help as much as it did at the start. It means there’s a sweet spot for how much effort, resources, or time you should use, and after that, it’s not as effective.
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