Given some examples of the law of diminishing returns in production. Specify which resources are variables and which ones are fixed.
Law of diminishing returns is the decline in marginal output in
the process of production by adding additional factor of production
and all the other factors remain constant. Labour is the variable
factor and capital with other factors of production are fixed.
Example in agriculture while using fertilizer it gives good yield
on any land but after a period of time even after adding fertilizer
the output of the crop doesn't increase. Here land is fixed factor
and manure is the variable factor.
Another example in a restaurant increasing the number of chefs will
not increase the meal which is the output due to limited space of
the kitchen and other resources. Here kitchen space ,utensils and
other things are fixed and the chef is the Variable factor.
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