According to Study.com, the law of diminishing return, also referred to as the law of diminishing marginal returns, states that in a production process, as one input variable is increased, there will be a point at which the marginal per unit output will start to decrease, holding all other factors constant. In other words, keeping all other factors constant, the additional output gained by another one unit increase of the input variable will eventually be smaller than the additional output gained by the previous increase in input variable. At that point, the diminishing marginal returns take effect.
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The above simply means that, as more and more variable factors are introduced into a fixed factor in production, at first there will be an increase but at a certain point there will be a decrease in the number of output produced.[the_ad id=”1100″]
HOW THE LAW OF DIMINISHING RETURN MIGHT AFFECT BITCOIN PRICE
Assuming bitcoin price is our output and users,consumers,investors, laws of countries and miners are all variables. Let’s begin the analysis and comparison
The price of bitcoin is currently driven by the increasing demand for bitcoin and favorable government policies in most countries. What if it gets to a point where every bitcoin users now owns sufficient number of bitcoins and everyone wants to sell with few persons ready to buy?
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In a such a situation where supply of bitcoin is now more than the demand for bitcoin, what could happen to the price of bitcoin then? Then maybe the law of diminishing return might just start to occur in bitcoin price as the price of bitcoin might then experience a sharp or gradual decline.[the_ad id=”1100″]
The next variable is government policies. What if the now favorable government policies suddenly becomes unfavorable? What if various government spurs fear among users of bitcoin like China did to the bitcoin market? What if these policies force bitcoin users to abandon the use of bitcoin? Then bitcoin price might likely experience a decline in general.
This is just an observation and it’s not meant to fuel any negative feelings. Investing in bitcoin now is still very lucrative and will yield high return. If you are interested in investing your bitcoin you can Call or WhatsApp Mr Pablo +2348117745973 or +2349083832420.