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Diminishing marginal returns:

This theory asserts that, other things being equal, with an additional input, output will eventually decline once a given number of producing units is achieved, i.e., output will increase at a diminishing rate as inputs are increased.

The law of declining marginal returns states that, other things being equal, with an extra input, output will eventually decline once a given number of producing units are realized, i.e., production will increase at a diminishing rate as inputs are increased.

As a result of this law of diminishing returns, creating one additional unit of output will eventually result in higher costs as the inputs are utilized less and less effectively.

The marginal cost curve may initially be downward sloping, indicating increased efficiency as production increases, but it will gradually climb, indicating rising costs with each unit of production and implying that costs will continue to rise as production increases.

The following diagram has been used to convey this concept: