(a) State the law of diminishing returns as it applies to agricultural production. [2 marks] Study the table below and use it to answer questions (b) and (c...

(a) The law of diminishing returns states that when additional equal units of a variable factor of production, such as fertilizer, are applied to a fixed factor, such as land, total output will initially increase at an increasing rate, then at a decreasing rate, and may eventually decrease.

(b) Completed table:

(c) Graph of yield of maize against quantity of fertilizer used:

The graph shows that from 0 to 20 bags of fertilizer, maize yield rises at an increasing rate: the successive increases in yield are 16, 24, 32 and 40 bags. This is the stage of increasing returns.

Beyond 20 bags, output still rises but at a decreasing rate. The increases in yield fall from 30 bags to 20 bags and then to 10 bags as fertilizer rises from 20 to 32 bags. This is the stage of diminishing returns.

At 34 bags of fertilizer, the yield is at its maximum of 180 bags and the additional yield is zero. When fertilizer is increased to 36 bags, yield falls from 180 bags to 170 bags, giving a negative return of 10 bags. Thus, after 20 bags of fertilizer, each further addition produces a smaller increase in maize yield, and excessive fertilizer eventually reduces output.