Law of Marginal Productivity comes to Macy’s

Law of Marginal Productivity comes to Macy’s

In theory, the more demand there is for a good or service, the more a producer wishes to provide this good, and that producing in bulk lowers costs. Even when consumer demand is down, a supplier can also produce more, in the hopes of defraying a decrease in price with a bulk increase in sales. However, certain costs of production are fixed. In other words, the Law of Marginal Productivity holds constant. This economic law states, namely that “when the technology of production and some of the inputs are held constant and the quantity of a variable input increases continually, the marginal productivity of the variable input will eventually decline.” (King, 2004)

This law is perhaps most obviously evidenced in agriculture or conventional factory production, where even if there is an increased demand for grapes, putting more and more workers onto the field to pick more of the grapes will eventually bottom out in value — each additional worker can only pick so many more of the desired fruits, or each worker in a factory can only work so much harder on a crowded assembly line, before the increase in wages does not pay for the increase in production and sales. Such “inputs that are held steady are called the fixed inputs.” (King, 2004) The costs of maintaining the depreciating inputs of land and capital are fixed costs for fixed inputs, as are the price of worker wages and required benefits, unlike the actual number of workers involved in production, which a factory owner, for example, can alter at his or her discretion.

Another way to express the law of marginal productivity is that, as the variable input increases, the output also increases, but at a decreasing rate. The marginal productivity of labor is the rate of increase in output as the labor input increases. To say that output increases at a decreasing rate when the variable input increases is another way to say that the marginal productivity declines. (King, 2004)

The “Law of Marginal Productivity affects not only factory production, and agricultural production” however. This law as well, affects retail stores. Stores have many fixed costs — not just wages, but lighting, air temperature control, and other maintenance costs — the longer a store is open during the day, even with an increased customer level of foot traffic, the more workers the store must have. “Over the years,” many department stores “have turned into clothing and beauty emporiums, but because they were trying to make the high profits that went with their high expenses – you don’t see marble floors in Target – they have paid dearly. “In other words, to be a department store of a certain caliber and to justify higher prices for goods, one must also, as a fixed cost input, make the store look like a place that sells expensive goods. (Rozhon, 2005)

But the desired increased foot traffic does not always, only translate into more sales, as “it is no longer the department store” as a place to buy goods, “that’s the lure,” for consumers. “It’s no longer even a shopping mall anymore – it’s an entertainment and lifestyle mall with playhouses, community halls and restaurants.” (Rozhon, 2005)

Thus, recently Federated Department stores announced that it was buying Lord & Taylor and Marshalls, to increase its diminishing profits from Macy’s and Bloomingdales, by expanding its venues of production, as it cannot defray its costs by cutting wages or maintenance costs of its current facilities. Federated found that lowering clothing prices was not working, given that “to compete with discount stores like Target, department stores have often reduced both prices and profits, and, analysts say, lost their reputation for high quality,” while still not being able to lower their prices as low as discount stores. The result was that the department stores lost their trademark for quality and were still turning customers in even greater droves to discount venues. Even Saks tried “an electronics department, something called the Elephant Pharmacy, even wine bars,’ but to little avail. (Rozhon, 2005) Still, “sales at May Department Stores in January were 7% less than they were in the same stores a year ago. Federated, which is receiving many plaudits now, was down 0.4% last month. Saks Department Store Group, which includes Parisian and Proffitt’s but not Saks Fifth Avenue, was down 0.9%.” (Rozhon, 2005)

While department store sales were down, costs of production remained fixed or increasing — thus selling a greater variety of goods (such as toys and electronics as some department stores have striven to do), with longer hours, or online hours, simply was not enough, to defray the fixed costs. Hence, consolidation was deemed necessary. One way to reduce fixed costs for retailers, of course, is to go online — needs no fancy lighting, marble floors, and only a skeleton staff. But for clothing manufactures, such as Lord & Taylor, 80% of its business is still done in the real rather than the virtual world. This is particularly true of stores that sell to both men and women. Despite men’s supposedly greater technical confidence, one salesmen noted, “After all, when a guy buys a suit, he wants to see a whole outfit; he doesn’t know, can’t enunciate it, but he wants to see mannequins with everything: the shirt, the tie, the socks, the shoes.” (Rozhon, 2005)

Thus, the trend to consolidation amongst department stores is likely to remain strong, as a way of defraying costs — even internationally, “The Macquarie CountryWide Trust of Australia and the Regency Centers Corporation agreed to buy 101 shopping centers from the California Public Employees’ Retirement System for about $2.74 billion, the companies said.” Around the word, retailers that rely upon foot traffic and the perception of quality are scrambling to stay ahead of Wal-Mart and Target’s cheapness and diversity of products. (Company News, 2005) Hopefully, the increased revenues from the consolidated stores will increase profits for the company, consolidate costs and lessen at least some of the fixed costs for the formerly individual department stores, and thus eventually increase sales and stimulate lagging productivity.

Works Cited

“Company News: Macquarie & Regency to Buy 101 Shopping Centers.” (16 Feb 2005) Business Financial Desk. The New York Times. Retrieved 1 Mar 2005 at fta=y

King, William (2004) “Law of Diminishing Returns.” Economics. Drexel University. Retrieved 1 Mar 2005 at

Rozhon, Tracey (2 Mar 2005) “No Longer the Queens of the Mall, Department Stores Try Makeovers.” The New York Times. Retrieved 1 Mar 2005 at

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper