The law of diminishing marginal utility helps to explain
A)the direct relationship between price and quantity supplied.
B)the law of demand.
C)why the production possibilities frontier is typically bowed-out.
D)why the production possibilities frontier is typically a straight line.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility explains why the demand curve slopes downward. As consumers consume more units of a good, the additional satisfaction or utility they receive from each additional unit decreases, causing them to be willing to pay a lower price. Therefore, the law of diminishing marginal utility is a key determinant of the law of demand.

The Law of Diminishing Marginal Utility Helps to Explain