The Law of Returns Teaches That for an Economic Good, There Is an Optimum

Even an infinitesimal quantity of b would be sufficient for the production of any quantity of d, provided the supply of c is large enough. On the other hand, an increase in the quantity of b available could not increase the output of d if the supply ofc does not increase. The law of returns asserts that for the combination of economic goods of the higher orders, factors of duction, there exists an optimum. If one deviates from this optimum by increasing the input of only one of the factors, the physical output either does not increase at all, or at least not in the ratio of the increased input.