Is there a term for the point at which returns begin to be diminishing returns?

Question

The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant ("ceteris paribus"), will at some point yield lower incremental per-unit returns"

Not necessarily in economic / production theory, except metaphorically. I was thinking about using it in a sentence about further study, or existential dread.

Peak? Can you give us an example? What context will it be used in if not economic/production theory? — Hank, Feb 03 '17 at 20:36
from that article "The law of diminishing returns states that in all productive processes, adding more of one factor of production, while holding all others constant ("ceteris paribus"), will at some point yield lower incremental per-unit returns". i was thinking of using the word in a sentence about further study, and / or continued existential dread @Hank — , Feb 03 '17 at 20:38
@Josh Has "inflexion point" been used in this manner before? Or any manner not related specifically to a point on a curve? — Hank, Feb 03 '17 at 20:41
@Hank - the concept of an inflexion point can be used both in math and figuratively in any way it may be useful to convey the idea of the change in a trend. — , Feb 03 '17 at 20:43
@Josh I don't see any reason why it can't be used in that manner, I just don't currently possess the ability to look and see if it has been used in this way before. — Hank, Feb 03 '17 at 20:44
@Josh- I was typing while you added your comment. Didn't mean to steal your thunder. — cobaltduck, Feb 03 '17 at 20:45
An inflection point is the point at which the 2nd derivative changes sign. Returns will still be increasing but at a decreasing rate. — Jim, Feb 04 '17 at 04:12

bvpx · Accepted Answer · 2017-02-04T22:29:43.303

30

Point of diminishing returns has been used to describe the point at which the law of diminishing returns kicks in.

Examples from literature:

A very general limitation on the scale of production is found in the economic law of diminishing or non-proportional returns. This law, first applied to land, states that if more and more men are set to work on a piece of land, the time comes sooner or later when the output of the last man added becomes less than the output of the man added before him. This may be called the "point of diminishing returns."

The Brevity Book on Economics, by Harrison McJohnston -- Brevity Publishers, 1919

More recently,

Insulation is a prime example of the "point of diminishing returns" in economics. In essence, the first layer of insulation you put on a home will hold in the most heat and save the most money, while each successive layer will provide less and less of a return for the same amount of investment.

Living Homes: Integrated Design & Construction, by Thomas J. Elpel -- HOPS Press, 2005

edited Feb 04 '17 at 22:29

answered Feb 03 '17 at 20:52

bvpx

534

1

I feel like the OP could've found this answer from a basic google search. Not contesting it's validity, just the original research that was done before asking the question. – Hank Feb 03 '17 at 20:57
7

@Hank do not understimate our lack of ingenuity – Feb 03 '17 at 20:58
1

also termed "the point of maximum Marginal Product" – Feb 03 '17 at 21:02
3

Links go bad easily, can you offer brief citations of the two articles you referenced? – JTP - Apologise to Monica Feb 04 '17 at 12:21
I like your thinking, @JoeTaxpayer. – bvpx Feb 04 '17 at 22:30
1

@Hank It's enough of a Jeopardy-style "stupid answer" that searching for it would likely not have made it clear that the phrase in the question is in fact the idiomatic expression sought. – chrylis -cautiouslyoptimistic- Feb 05 '17 at 20:07
@chrylis I googled his title and found it lol – Hank Feb 05 '17 at 20:37

cobaltduck · Answer 2 · 2017-02-04T13:18:36.697

24

In mathematics, a point where the concavity of a curve changes from concave upward to concave downward is called an inflection point. In more mathematical terms, it is also a point where the second derivative of the curve changes from positive to negative or vice versa, as the example linked in wolfram-alpha shows.

When the marginal returns are increasing, the profit curve is concave up (has a positive second derivative) and when marginal returns are diminishing, the profit curve is concave down (has a negative second derivative). Thus the transition meets the definition of an inflection point.

edited Feb 04 '17 at 13:18

answered Feb 03 '17 at 20:44

cobaltduck

12,897

the only issue i have with this answer is that as a metaphor it may be strained given e.g. that the amount of investment isn't measured. the phrase "i have reached the inflexion point of further study" does i think make sense tho – Feb 03 '17 at 20:47
3

@user3293056: As an example, "Ladies and gentlemen, I believe we have reached the inflection point in our efforts to curb social injustice..." Works for me. But I am a little weird and a former math major. – cobaltduck Feb 03 '17 at 20:49
1

@user3293056 - you still have a series of values that if you represent graphically with a curve it will show an inflexion point. – Feb 03 '17 at 20:49
2

@Josh i believe we have reached the inflexion point of this discussion – Feb 03 '17 at 20:50
This inflection/ inflexion thing- is this a BrEng/ AmEng difference? – cobaltduck Feb 03 '17 at 20:50
http://english.stackexchange.com/questions/342402/difference-between-inflection-and-inflexion – Feb 03 '17 at 20:56
@cobaltduck i use it partly cos i'm ued to 'reflexion', which has other meanings beside 'reflection', tho 'inflexion' does not – Feb 03 '17 at 20:59
1

@cobaltduck I believe you meant to say, "recovering" math major, right? – BlackVegetable Feb 04 '17 at 03:48
1

@BlackVegetable - Currently gainfully and happily employed in software engineering. 'Nuff said. – cobaltduck Feb 04 '17 at 13:20
Huh. Before reading this and poking about, i thought that "inflection point" and "cusp" and "disjoint point where e.g. the mathness behind the curvature changes; e.g between segments in a long bezier curve structure", now it seems that the first two are semi-inverse cousins and I can't even locate a proper name for the third o.o. – Weaver Feb 05 '17 at 13:01
@cobaltduck Yes and no. As of 2000, in Britain the inflection spelling is about 5 times as common as the inflection spelling, whereas in America it is about 26 times as common. So yes, inflexion *is* “more common” in Britain than in America, but it is nevertheless still a minority spelling there as well — and probably always has been. In America, inflexion is surpassingly uncommon. – tchrist Feb 05 '17 at 18:20
@user3293056 Now that’s interesting! I was unaware that reflexion and reflection ever meant different things. Can you give an example? Is this somehow about the differences between reflexes and things which reflect? See also http://english.stackexchange.com/a/48522/2085 – tchrist Feb 05 '17 at 18:22
@tchrist oops i mean reflexive https://en.wiktionary.org/wiki/reflexive :/ see http://english.stackexchange.com/questions/48519/difference-between-reflection-and-reflexion for the former – Feb 05 '17 at 18:58

score 7 · Answer 3 · answered Feb 03 '17 at 23:15

If you conceive of returns as occurring along a bell curve rising to a single maximum point and then falling from there, the high point in the curve is the point of diminishing returns—that is, the point at which the returns stop growing and (immediately thereafter) begin to shrink.

This is the supposed insight at the core of the famous "Laffer curve," where the curve in question purports to track tax revenue based on different tax rates and their effects on taxpayers' inclination to earn taxable income. In the Wikipedia article about the Laffer curve, the point at which returns cease to increase and begin to diminish is called the "maximum revenue point."

I suspect, however, that most people who hear or use the phrase "point of diminishing returns" do not immediately visualize it as the apex of a roughly parabolic curve; instead, they probably think of a point at which the value of the returns has become disappointingly small. Such a point is likely to be fairly far down the flank of the curve from the apex, and might be thought of in practical terms as the "point of abandonment." After all, the hardest part of halting any endeavor at the true "point of diminishing returns" is recognizing that point for what it is: unlike, say, a mountain peak, an economic apex isn't easy to identify until you've gone a considerable way down the other side.

score 7 · Answer 4 · answered Feb 04 '17 at 02:28

7

There is also

tipping point

meaning roughly the same as "point of no return".

answered Feb 04 '17 at 02:28

GEdgar

25,177

2

I'd argue that this really isn't the same thing as a point where diminishing returns begin; a tipping point is much more severe. Adding additional resources while the returns diminish may be inefficient; increasing effort beyond a tipping point is more likely to be actively detrimental. – Periata Breatta Feb 05 '17 at 01:12

score 4 · Answer 5 · answered Feb 03 '17 at 21:09

Depending on the context, the point where you start to get diminishing returns might be called the "sweet spot". From the American Heritage® Dictionary of the English Language, Fifth Edition:

sweet spot n.

The place on a bat, club, racket, or paddle, where it is most effective to hit a ball.

An area or range that is most effective or beneficial: an engine's sweet spot of rpm's for maximum fuel-efficiency; a store's demographic sweet spot of women in their twenties.

score 3 · Answer 6 · answered Feb 04 '17 at 02:23

The phrase "it's all downhill from here" springs to mind.

While not conveying the exact meaning you wish to express, it's probably more idiomatic and more likely to be understood right off the bat. The other answers are closer to the meaning you want to confer, but I feel at least some of them would either require some explanation or are less likely to be known and understood.

score 2 · Answer 7 · answered Feb 04 '17 at 05:41

2

inflection point
knee point
tipping point (marginal)

answered Feb 04 '17 at 05:41

user207421

246

score 0 · Answer 8 · answered Feb 05 '17 at 05:58

0

Depending on the context, saturation may be a good word. For example, some say "the market is saturated with companies that do X". What is means of course, is that there are diminishing returns to doing more of X in the economy.

answered Feb 05 '17 at 05:58

DepressedDaniel

103

Mike D. · Answer 9 · 2017-02-06T04:08:01.397

I would say the word peak could be used in certain contexts.

adjective: peak

at the highest level; maximum. "the canal was restored to peak condition"

characterized by maximum activity or demand. "traffic speeds are reduced at peak hours"

synonyms: maximum, maximal, top, greatest, highest, utmost, uttermost, extreme; https://www.google.com.au/webhp#q=define:+peak

For example "Peak oil":

Peak oil, an event based on M. King Hubbert's theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which it is expected to enter terminal decline. https://en.wikipedia.org/wiki/Peak_oil

Is there a term for the point at which returns begin to be diminishing returns?

9 Answers9

Linked

Related