The law of diminishing returns is one of the very old laws in economics. Sir Edward West was the first to explain this law. It states that when an additional unit of a variable factor is applied while other factors are fixed, the total product increases at a decreasing rate. According to Prof. Boulding, “As we increase the quantity of one input which is combined with a fix quantity of the other input, the marginal physical productivity of the variable input must eventually decline.”
