<P> The law of diminishing returns states that in all productive processes , adding more of one factor of production , while holding all others constant ( `` ceteris paribus '' ) , will at some point yield lower incremental per - unit returns . The law of diminishing returns does not imply that adding more of a factor will decrease the total production , a condition known as negative returns , though in fact this is common . </P>
when does law of diminishing returns set in
in all productive processes , adding more of one factor of production , while holding all others constant ( `` ceteris paribus '' ) , will at some point yield lower incremental per - unit returns