DescriptionProduction Function - Decreasing returns in capital.png
English: The file represents the output function in terms of capital input. Taking into consideration that labor input, L, is constant, it can be observed that as K increases, the increase on the output, Y, becomes less and less significant. This fact can be proven by the flatter slope on point B than on point A. The slope of any point in the curve is the marginal product of capital, and the evidence that the slope becomes less steeper as K rises is called diminishing marginal returns of capital.
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