Based on the given scenario, it can be inferred that the firm is experiencing the effects of the law of diminishing returns
This refers to the economic law that states that if production techniques are fixed and a firm is not able to increase output and faces declining units, then it is in the decline of resources/production.
Hence, we can see that based on the given scenario, we can see that this is the perfect description of diminishing returns because additional units cannot be produced.
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