The principle of diminishing marginal utility says that:
A) as more of a good or service is consumed, demand decreases.
B) as more of a good or service is consumed, the price will rise.
C) the marginal utility of additional units consumed decreases.
D) an increase in income causes demand to increase.

Question

Quizplus · Accepted Answer

The principle of diminishing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction that they receive from consuming each additional unit will eventually start to decrease. In other words, the marginal utility of each additional unit consumed will diminish. This helps to explain why people are willing to pay more for the first few units of a good or service, but may become less willing to pay as much for additional units beyond a certain point.

The Principle of Diminishing Marginal Utility Says That