How does the law of diminishing apply to other variable cost such as labour cost?
1 If employees are required to work more hours, they might become less efficient as they tire, slow down and make more errors.
2 If employees are required to work more hours, generally overtime will have to be paid at a premium rate.
3 If more people are employed then they have to be attracted to the job (higher wages perhaps) and also the company might be forced to recruit less good people just to get enough employees.
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