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diminishing returns

This is a discussion on diminishing returns within the Excel Questions forums, part of the Question Forums category; is there a formula or something to calculate the law of diminishing returns?[decreasing marginal returns]...

  1. #1
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    Default diminishing returns

    is there a formula or something to calculate the law of diminishing returns?[decreasing marginal returns]

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    Board Regular NBVC's Avatar
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    This page talks about working with constraints and gives an example using diminishing profit and returns.....

    http://support.microsoft.com/kb/843304#top
    Where there is a will there are many ways. Finding one that works for you is the challenge!

    Microsoft MVP - Excel



  3. #3

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    You don't calculate laws, you might be able to calculate outcomes.

    Diminishing returns is a concept due to classical economists such as Malthus, Menger and Senior.

    These days it's usually taken to be the (presumed decreasing) rate of change of output from a production process as an input increases with other inputs staying the same.

    Most easily done by taking the second partial derivative of a production function.

    The rate of change of the rate of change of output (intentional doubling up here) (i.e. increasing or diminishing returns) be more or less be calculated if you make very specific assumptions about just what is happening and have an adequate set of data. You also need be careful (and this isn't easy) that you aren't actually calculating something else, even if the (excel) calculation itself is arithmetically accurate.

    What's this for? A college project or something?

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