The basic doctrine of consumers' surplus is based on
A)indifference curve analysis
B)revealed preference theory
C)law of substitution
D)law of diminishing marginal utility

Question

Quizplus · Accepted Answer

The basic doctrine of consumers' surplus is based on the law of diminishing marginal utility, which posits that as a consumer consumes more of a good, the additional satisfaction (marginal utility) derived from each additional unit decreases. This concept is foundational to understanding consumers' surplus, which is the difference between what consumers are willing to pay for a good or service versus what they actually pay.

The Basic Doctrine of Consumers' Surplus Is Based on