The law of diminishing marginal utility gives us a deeper understanding of the downward-sloping demand curve because
A)Consumers are willing to pay a higher price for a greater quantity.
B)Consumer tastes change due to advertising.
C)When marginal utility is high,we are willing to pay a higher price.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as we consume more of a good, our additional satisfaction from each additional unit consumed decreases. This means that as we consume more, we are willing to pay a lower price for each additional unit. As a result, the demand curve slopes downwards. Therefore, when marginal utility is high, we are willing to pay a higher price for a good, but as we consume more and our marginal utility decreases, we become less willing to pay a higher price.

The Law of Diminishing Marginal Utility Gives Us a Deeper