Diminishing returns is an economic concept that states that at a certain point of input, adding additional resources will yield a smaller increase of output than it would have previously. The law of diminishing returns states that the increased efficiency of a production system (or other activity) will eventually drop off, and any additional effort or input will produce a reduce increase in output. This law is important as it helps provide an understanding of why some production systems eventually become relatively inefficient compared to other systems.

See also: feedback loop, game theory, hill climbing, low-hanging fruit, possibility space