The law of diminishing marginal utility applies to goods with negative income elasticities;it does not always apply for goods with positive income elasticities.

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The law of diminishing marginal utility states that as a consumer increases consumption of a product, the marginal utility or satisfaction derived from each additional unit decreases. This applies to all goods regardless of their income elasticities. Positive income elasticity means that as income increases, demand for the good also increases. While the law of diminishing marginal utility may not be as noticeable for goods with positive income elasticities, it still applies as the overall satisfaction from consuming the good will eventually reach a point of saturation.

The Law of Diminishing Marginal Utility Applies to Goods with Negative