The Law of Diminishing Marginal Returns
As variable resources (workers) are added to fixed resources (ovens, machinery, tools, etc.), the additional output produced from each additional worker will eventually fall.
Three Stages of Returns
Stage I: Increasing Marginal Returns MP rising, TP increasing at an increasing rate
Stage II: Decreasing Marginal Returns MP falling, TP increasing at a decreasing rate
Stage III: Negative Marginal Returns MP is negative, TP decreasing
