Law of Diminishing Returns
Plain definition
As more and more of one input is added while other inputs stay fixed, the extra output from each additional unit eventually gets smaller.
In economics
This short-run law explains why marginal product first rises (specialization) and then falls (crowding, fixed machinery). It only applies when at least one input is fixed — in the long run, all inputs can be scaled together, so diminishing returns need not occur.
Example
Adding a second and third cook to a small kitchen speeds service, but the 8th cook mostly gets in the way — the extra meals each additional cook adds shrink toward zero.
Diminishing returns is not the same as negative returns or falling total output. Under diminishing returns, total output still grows, just more slowly; negative returns (MP below zero) are the later stage where total output actually falls.