Law of Diminishing Marginal Returns

Rochelle Ruffer, Nazareth College

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This material is replicated on a number of sites as part of the SERC Pedagogic Service Project


Students will be asked to predict what happens to marginal product in the short run. Students will then take part in an experiment to produce greeting cards. Students will reflect on their initial prediction once the experiment is over.

Learning Goals

Difference between Total Product and Marginal Product; Law of Diminishing Marginal Returns;

Context for Use

Principles of Microeconomics classroom. Size of class does not matter. This activity is done when presenting product curves to the class and the concept of marginal product (or marginal physical product).

Description and Teaching Materials

eYou will need to copy the predict step (See Word file (Microsoft Word 28kB Aug20 12)) and hand out to each student. You will need to copy the reflect step (see Word file (Microsoft Word 2007 (.docx) 10kB Aug20 12)) and hand out to each student. There are many different reflections you can use. You may combine the predict and reflect steps into one handout, but just make sure its clear the students should wait to complete the reflection until after the demonstrate step. If you are going to demonstrate using the greeting card experiment, you will need 2 pens, paper, and a desk space.

Teaching Notes and Tips

This Interactive Lecture Demonstration is to teach the law of diminishing marginal returns (LODMR). The predict step and reflect step are necessary in order to create the time for telling for students. The demonstration step (see Word file (Microsoft Word 2007 (.docx) 11kB Aug20 12)) can be varied to match the style of the professor performing the ILD. Students often think that LODMR says that MP will become negative or that Total Product will be fall from the beginning. The experiment helps to show them what we need.


The reflection can be graded on content but also on ability for student to realize when they "got it". This is tough to grade, but it is important for students to know you at least look at the reflection. The predictions are never graded as they are meant for most students to get wrong.

References and Resources

ses Economists Play: Games 27 and 28 also are possible experiments to use to teach the law of diminishing marginal returns.