Class XI, Principles of Economics, "Does it apply only to Agriculture?"
Does it apply only to Agriculture?
It is wrong to
say that the law only applies to agriculture as agriculture is always
subject to diminishing and manufacturing to increasing returns. The
application of the law is universal. It applies to industries also. If
the industry is expanded too much and becomes unwisely supervision will
become tax and the cost will go up. The law of diminishing returns thus
sets in. The only difference is that in agriculture it sets in earlier
and in industry much later.