when reviewing production to cost inputs these calculations are important for businesses to consider 
real world examplesin its most simplified form diminishing marginal productivity is typically identified when a single input variable presents a decrease in input cost a decrease in the labor costs involved with manufacturing a car for example would lead to marginal improvements in profitability per car however the law of diminishing marginal productivity suggests that for every unit of production managers will experience a diminishing productivity improvement this usually translates to a diminishing level of profitability per car diminishing marginal productivity can also involve a benefit threshold being exceeded for example consider a farmer using fertilizer as an input in the process for growing corn each unit of added fertilizer will only increase production return marginally up to a threshold at the threshold level the added fertilizer does not improve production and may harm production in another scenario consider a business with a high level of customer traffic during certain hours the business could increase the number of workers available to help customers but at a certain threshold the addition of workers will not improve total sales and can even cause a decrease in sales considerations for economies of scaleeconomies of scale can be studied in conjunction with the law of diminishing marginal productivity economies of scale show that a company can usually increase their profit per unit of production when they produce goods in mass quantities mass production involves several important factors of production like labor electricity equipment usage and more when these factors are adjusted economies of scale still allow a company to produce goods at a lower relative per unit cost however adjusting production inputs advantageously will usually result in diminishing marginal productivity because each advantageous adjustment can only offer so much of a benefit economic theory suggests that the benefit obtained is not constant per additional units produced but rather diminishes diminishing marginal productivity can also be associated with diseconomies of scale diminishing marginal productivity can potentially lead to a loss of profit after breaching a threshold if diseconomies of scale occur companies don t see a cost improvement per unit at all with production increases instead there is no return gained for units produced and losses can mount as more units are produced 