if there are diminishing returns to labor , then as more workers are hired the total amount produced by all of the workers will decrease .

Diminishing returns to labor

"if there are diminishing returns to labor , then as more workers are hired the total amount produced by all of the workers will decrease."

The above statement is not correct.

The total amount produced by all of the workers will not decrease.  It will increase, but the increase will not be as much as it was before the continued increase in labor because of the law of diminishing returns.

Explanation:

The law of diminishing returns to labor explains that the marginal increase in total output will not be the same as it was before the increase because one of the inputs in production, like capital is kept constant, while labor is being continuously increased.  The reason for this is that the capital assets will not be enough for the increasing population of labor when the entity has reached its full capacity.  Unless capital assets (capacity) is increased as labor is increased, there will reach a point when the production per labor will start to decrease instead of increasing, but the total production will continue to increase.

In Economics, the law of diminishing returns holds that if one input is held constant (capital) while other inputs ( e.g. labor) are being increased, a point is reached when the additional inputs yield smaller output or diminishing returns relative to the increasing inputs.  This law is also called the principle of diminishing marginal productivity.  This principle teaches managers to be aware that if they want to achieve total increases in productivity, it is not only one input that should be increased, especially after a point.

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