Why marginal product first rise then declines?

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1150681

2026-03-25 08:15

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The marginal product initially rises due to the efficient utilization of fixed resources when additional units of a variable input are added, leading to increased output. As more units are added, however, diminishing returns set in; each additional input contributes less to overall production because the fixed resources become over-utilized or congested. This results in a decline in marginal product, as the benefits of adding more input diminish. Ultimately, this interplay between efficiency and resource limitations explains the initial rise followed by the decline in marginal product.

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