I really love meat! What does that have to do with Diminishing Marginal Returns (DMR)? GOOOOOood question. It has everything to do with it. Here are some examples of (the law of) diminishing returns:
Have you ever eaten a steak at Denny’s? How would would you rate the meat there, not the best huh. The cost $10
How do you like eating Outback Steakhouse New York steak? Really tasty at an affordable price, ~$25
And then you go to Masa where you are forking out $150+ for some fancy Kobe Japanese meat.
So this brings us to what is Diminishing Marginal Returns. When you go from Ruth Chris steak to Masa, the amount of money you are paying does not justify the steak since the quality is not going to be that much better. The type of meat you can get cannot get that much better or worth it after a certain point. It is still meat from a cow and there are only so many ways you can tenderize that meat. If you want to talk more about econ terms you’ll find me scarfing high-quality In-n-Out Burgers.
Note: This theory applies to so many things. Think about Taco bell. How many different ways can they make a taco?