"Diminishing returns" also means next to nothing. Technically speaking, it means that the second derivative of output with respect to input is negative, when we care about the first. For example, you exhibit "diminishing returns" for each calorie you eat-- the first 500 is far more important than the second 500-- but this doesn't mean you eat only 500 calories per day.
What actually matters is not whether returns diminish, because this tends to happen right away if inputs are allocated to the most efficient projects, but the point where the marginal value gained is less than the cost of the input.
"For example, you exhibit "diminishing returns" for each calorie you eat-- the first 500 is far more important than the second 500-- but this doesn't mean you eat only 500 calories per day."
No, but it does mean there exists a point where you should stop eating more calories.
What actually matters is not whether returns diminish, because this tends to happen right away if inputs are allocated to the most efficient projects, but the point where the marginal value gained is less than the cost of the input.