Diminishing marginal utility means that
A) marginal utility decreases as consumption decreases.
B) marginal utility increases as consumption increases.
C) marginal utility decreases as consumption increases.
D) total utility decreases as marginal utility decreases.
E) total utility decreases as marginal utility increases.

Question

Quizplus · Accepted Answer

Diminishing marginal utility refers to the concept that as more units of a good are consumed, the additional satisfaction or utility gained from each additional unit decreases. This explains why individuals tend to become less willing to pay for additional units of a good or service as they consume more of it. Thus, marginal utility decreases as consumption increases.

Diminishing Marginal Utility Means That