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Which Factor of Production does not exhibit diminishing returns?

Which Factor of Production does not exhibit diminishing returns?

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Answer #1

The law of diminishing returns means that as the factors of production are increased the marginal product added by the additional variable factors decreases.

The factors of proudction are;

land, labor, capital and Entrepreneurship.

Since land, labor and capital are inputs which are needed for the production, so when these inputs are used more these resources gives diminishing returns.

But the Entrepreneurship is a person or organisation which put money for the production and Entrepreneurship purchases land, labor capital and start production. But when more Entrepreneurs are added they does not gives diminishing retuns.

Hence Entrepreneurship is the factors of production which does not exhibit diminishing returns.

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