Which economic principle states that increasing one production factor with a fixed amount of others leads to smaller output increases?

The Law of Diminishing Returns is a fundamental economic principle that describes the decline in the incremental output resulting from the continued addition of one input while keeping other inputs constant. In practical terms, this means that as a producer increases the quantity of one factor of production—say labor or land—while holding other factors constant, the additional output generated from each new unit of that factor will eventually start to decrease.

This principle is commonly observed in agricultural production, where adding more workers to a fixed plot of land may initially result in significant increases in crop yield. However, after a certain point, adding more workers yields smaller increases in output because the land becomes overcrowded, and not all workers can effectively contribute to production. In this scenario, farmers may encounter limitations due to space or resources, proving that merely adding more of one factor does not proportionately increase output indefinitely.

The other options are related concepts in economics but do not specifically address the relationship highlighted in this question. Economies of Scale pertain to the cost advantages obtained due to the scale of operation, Opportunity Cost relates to the value of the next best alternative that is forgone when making a decision, and Consumer Choice Theory examines how consumers make choices based on preferences and budget constraints, none of which directly