Diminishing marginal returns occurs because

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    the first laborers hired are the most qualified, but as the quantity of labor increases the firm draws from a less qualified pool of labor.
     as more laborers are hired, workers increasingly share use of other fixed inputs, and so their ability to be increasingly productive is limited.
     total output falling once too many workers are involved in the production process.
     Low unemployment rates mean that qualified labor is more and more difficult to find as hiring of labor increases.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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as more laborers are hired, workers increasingly share use of other fixed inputs, and so their ability to be increasingly productive is limited.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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