Home Insights The Law of Decreasing Returns and Triangle Inequalities

The Law of Decreasing Returns and Triangle Inequalities

by C Roberts

In economics, a triangle inequality is an economic theory that states that for a triangle with three distinct sides, both its angles must be smaller than or equal to one another. The name “triangle inequality” originates from the fact that it was first applied in the context of measuring triangles. In economics, a triangle is a perfect triangle with its three equal sides but is not necessarily perfectly symmetrical.

A triangle is a triangle because it can be drawn so many ways. In fact, there are infinitely many ways to draw a triangle and no matter which way you draw, you will end up with a perfectly symmetrical triangle.

What makes the triangle inequality so important in economics is that it demonstrates that an economy is efficient if the value of goods produced by the economy is equal to the value of goods sold by the economy. The triangle has a lower incidence of negative income tax, less incidence of inflation, and less incidence of unemployment because it can be said to have an economic optimum, a level of production where the overall effect on the economy is exactly what the economy would experience in the absence of a particular feature. However, no feature exists for which it would not have an economic optimum. Thus, this phenomenon can be called the Law of Inefficiency or the Law of Shocks.

The triangle can also be used to illustrate the distribution of income within the economy. For example, when comparing the economic condition of the United States versus the other wealthy nations, it can be seen that the United States is far more unequal in terms of income than any of these other countries. However, all of these countries are not equally unbalanced because of their different features. For instance, one of these other countries is much poorer than the United States while the United States is considerably richer than the other country.

When looking at the distribution of income within a triangle, it is important to keep in mind that the distribution of income within a triangle is not necessarily equal. The distribution of income within a triangle is determined by the ratio of one side to the other side. For example, when a triangle is made up of a straight line and a curve, the ratio of one side to the other side will be greater for a triangle made up of a straight line than it will be for a triangle made up of a curve. Therefore, when a triangle is created, one of the sides will be greater than the other side while neither of the sides is greater than the other side. This is called a ratio of one to zero.

Another thing to consider when looking at the distribution of income levels within the triangles is that this type of inequality occurs because the size of an area influences the amount of income earned by someone within that area. For example, someone who lives in a small town will earn more than someone in a large city simply because the income that person earns within a small town is lower than that earned by someone who lives in a large city. In some cases, this kind of inequality is referred to as the law of diminishing returns.

The law of diminishing returns is important because it shows that an economic equilibrium will occur when the income of an economy is equalized over time. If we assume that the income level of the United States is the same today as it was a hundred years ago, the ratio of one side of the triangle to another side of the triangle will always remain the same. However, if, after a period of time, if the income of one group increases to be more than the income of another group, the ratio of the other side of the triangle to the other side of the triangle will decrease until it is equalized.

To illustrate this concept with an example, if someone were to live in a small town and earn one million dollars each year, this person will have the same income as someone who lives in a city and earns two million dollars per year. However, the second person in this example would earn a million more dollars than the first person in a hundred years. Therefore, this person will have a higher ratio of income than the person living in the large city.