If the price of a good decreases, the resulting increase in the quantity purchased decreases the marginal utility of the good.

Question

Quizplus · Accepted Answer

This statement is true according to the law of diminishing marginal utility. As the quantity of a good consumed increases, the marginal utility of each additional unit consumed will eventually decrease. Therefore, if the price of a good decreases and the quantity purchased increases, the marginal utility of the good will decrease.

If the Price of a Good Decreases, the Resulting Increase