diminishing returns

diminishing returns definition - business

diminishing returns

Successively smaller increases in output that result from adding additional units of input. Adding a third cashier to the checkout section of a store is likely to be less productive than was the addition of the second cashier. Adding a fourth cashier is likely to produce even smaller gains in revenue. Also called law of diminishing returns.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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