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Hey You Econ Guys

tinselwolverine

tinselwolverine

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Regarding the law of dimishing returns, in that graph, what is the term for the point of maximum efficiency, just before returns start to diminish? I don't remember it from Econ 101 at Michigan, and I just actually can't find a specific name for it on line...
 
I think you're thinking of the point at which the derivative of the graph of efficiency is at its maximum. in theory, a graph of something like efficiency (as a function of something "X") would go on forever, but there would be some point at which the marginal efficiency would be going down; that would be the point you pick.

uh, or something.
 
typically, the outcome that maximizes efficiency is where marginal cost = marginal benefit (or marginal utility). that's another way to say what I think Tinsel is looking for.
 
Not optimal yield. I looked it up, and what I was thinking of is the maximum sustainable yield, but I don't think that is it.
 
as a practicing economist, this is where we usually say "you should have quit while you were ahead" but rarely is anything in reality so quantifiable..in real time..so marginal utility is essentially a phantom; at least in my day to day. I'll leave that to the Kaizen devotees who worship this notion.
 
Not 100% sure, and I can look it up later, but I believe it is just called the "point of diminishing returns".

. . . as erg57 pointed out - in real life situations it is extremely difficult to accurately calculate that point, because a key part of it is "all other factors remaining the same". When has that ever happend in real life production situations?
 
Last edited:
KAWDUP said:
Not 100% sure, and I can look it up later, but I believe it is just called the "point of diminishing returns".

. . . as erg57 pointed out - in real life situations it is extremely difficult to accurately calculate that point, because a key part of it is "all other factors remaining the same". When has that ever happend in real life production situations?
Click to expand...

Exactly.

If there were an actual name, I was gonna use it in a punchline of a joke I was trying to come up with.

That's about as close as to a real life situation as it was ever gonna come.

"Point of diminishing returns," though...kinda hard to come up with a way to make that funny.

Maybe Robin Williams could.

Or Chris Rock.

But I'm thinking more Robin Williams.
 
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