The law of diminishing returns is both a biological and economic law. The production response curve has three components. Stage 1 shows that each additional input of a unit results in a greater output than the previous unit of input. In Stage 2, each additional unit of input results in additional output but a lesser amount than the previous unit of input. Stage 3 results in no additional output for a unit of input or may actually reduce the amount of output. If the nodes on a cotton plant are used as proxies for inputs, we find that at a price of 70 cents per pound at node 18, the output exceeds the cost of a common insecticide application of $14.41. The output at node 19 has a value less than this cost; thus, it would reduce gross returns to make an insect control application at this point. At the price of 50 cents per pound, the last node that is economical to protect is node 17 as the value at node 18 is less than the cost of the unit of input. Given the outlook for prices in the year 2000, this clearly indicates that not only individual inputs must be considered, but the total package of inputs if we are to realize any returns. Regrettably, at expected prices what we may be concerned with is the reduction of loss.