What is the Law of Diminishing Returns?

The law of diminishing returns is an economic concept that basically says, the more help you get, the less each additional unit of help you get helps! Think of it this way: let’s say you have a big pile of laundry. In fact, you probably need help to wash all of it by hand, so you hire someone to help. This person helps a lot and probably cuts your work in half. But you have enough money to hire a second person, and they cut your work load by even more. Now assume you can keep hiring more and more people. As it happens, the wash bin is only big enough for 4 people to stand around. Therefore, you can hire a 5th person to dry, a 6th person to fold, but after that, more people just get in your way. If you were to hire 10 people, there would be chaos and it would actually be harder. This is the law of diminishing returns.