This mental model explains an economic principle that beyond a certain point, additional investment or effort yields decreasing incremental outputs or results.
The 'Law of Diminishing Returns' is an economic concept that demonstrates a point at which new investments or efforts do not yield equivalent benefits. For instance, if a factory increases the number of workers but keeps machinery constant, there may be an initial increase in production, but eventually, this will decrease as the workers outpace the capacity of the machines. This concept serves as a reminder to seek optimal balance and apply efforts where they are most effective.
We reach a point, in other words, where the law of diminishing returns kicks in, and more becomes too much.
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