What does the assumption of diminishing marginal utility mean?
A) eventually additional units consumed will lead to a decline in total utility.
B) utility cannot be precisely measured but consumers can produce a ranking of consumption choices.
C) as more units are consumed each additional unit will provide less and less additional utility.
D) an increase in units of labor will leads to less and less additional output.

Question

Quizplus · Accepted Answer

The assumption of diminishing marginal utility means that as more units are consumed, each additional unit will provide less and less additional utility. This means that there is a saturation point where additional consumption will no longer increase overall satisfaction or happiness.

What Does the Assumption of Diminishing Marginal Utility Mean