Which statement is TRUE if the principle of diminishing marginal utility applies?
A)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives the same marginal utility.
B)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives less marginal utility.
C)When a customer at the Pie Palace continues to eat more pie,each additional piece of pie lowers total utility.
D)The total utility of pie is at a maximum,while the marginal utility of pie is still increasing.

Question

Quizplus · Accepted Answer

The principle of diminishing marginal utility states that as consumption of a good or service increases, the additional satisfaction gained from each additional unit of the good or service decreases. Therefore, option B is true as each additional piece of pie gives less marginal utility. Option A, C and D are incorrect based on the principle of diminishing marginal utility.

Which Statement Is TRUE If the Principle of Diminishing Marginal