1 The data used have related only to a limited range of output, the normal
output range of the firms studied. As already explained in the previous
chapter, it may well be that the law of diminishing returns only starts to
take effect as firms approach full capacity, perhaps at around 95 per cent of
maximum output. Firms do not normally operate at this level, and indeed
managers try to avoid such operation because of the rising unit costs.
2 The studies have actually been long-run rather than short-run, because
capital inputs have varied, allowing the ratio of labour to capital to remain
constant.