What can lead to the law of diminishing marginal returns in production?

The law of diminishing marginal returns occurs when, in the short run, one factor of production is increased while others remain constant. This typically applies to a situation where an agricultural field is used as a fixed resource, and labor (the variable factor) is increased. Initially, adding more labor may lead to more output since more workers can collaboratively increase production.

However, as more workers are hired, each additional worker will have less and less fixed resources (for instance, land, equipment, etc.) to work with. This leads to a point where each additional unit of labor contributes less to overall output than the previous one, resulting in diminishing marginal returns. Thus, the rationale behind why keeping the fixed factors constant while increasing variable factors leads to diminishing marginal returns is grounded in the limitations of the fixed factors that restrict how much productivity can increase with additional variable input.

In contrast, increasing capital investment without labor would not directly lead to diminishing returns related to labor since there is no change in the labor input to experience diminishing returns. Removing variable factors from production would typically lead to reduced output rather than diminishing returns. Reducing the number of fixed factors in production can change the production function but doesn't inherently lead to diminishing marginal returns in the way described in the question.