The law of diminishing marginal utility is in effect when marginal utility is
A) positive and increasing.
B) positive and decreasing.
C) initially zero and then increasing.
D) initially zero and then decreasing.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a person consumes more of a good, the additional (marginal) utility from each additional unit of the good decreases, hence marginal utility is positive but decreasing.

The Law of Diminishing Marginal Utility Is in Effect When