Explain the law of diminishing returns. What will be an ideal ...

[maegan_martin]

Explain the law of diminishing returns.
 
  What will be an ideal response?

Question 2

Competition keeps prices lower for consumers. So why do we have patent laws?
 
  What will be an ideal response?

[amcvicar]

Answer to Question 1

The law of diminishing returns says that when additional units of a variable input are added to fixed inputs after a certain point, the marginal product of the variable input declines.

Answer to Question 2

Patent laws are necessary to promote innovation. Without such laws an inventor might spend countless hours and a great deal of money developing a new product, put the product out into the market only to have a competitor copy it without incurring any of the time or costs to develop it. In the long run, this prospect would serve as a mighty disincentive to innovate and so would drastically reduce the supply of new products that come into the market.