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Diminishing means becoming smaller and smaller. While diminishing pain is a good thing, diminishing returns on your investment is not so welcome. The law of diminishing returns refers to the tendency at a certain point for continued effort in an area to begin producing a smaller and smaller result.
â¢ Diseconomies of scale and diminishing returns are both concepts that represent how the company can end up making losses as inputs are increased in the production process. â¢ Diminishing returns to scale looks at how production output decreases as one input is increased, while other inputs are left constant.