Law of diminishing returns

Define short run

Where at least one factor of production is fixed

What does the law of diminishing returns state

Law of diminishing returns states that in the short run when variable factors of production are added on top of fixed costs marginal costs will fall initially and then rise

But also that in the short run marginal product will fall initially when factors of production are added over fixed costs and then rise

Explain the initial drop in MC / rise in MR

The first work makes more of a good, then the next worker will learn off of the first worker and specialise and so will the third until each task can be delegated to a worker (Labour productivity increases)

Explain the resulting rise in MC / fall in MR

Fixed costs can’t take more than a certain number of workers (Not enough ovens, sinks.ect) and people begin to get in each others way decreasing productivity