The law of diminishing marginal utility states that
A)eventually total utility falls as more of a good is consumed, other things constant.
B)the extra satisfaction from consuming a good decreases as more of a good is consumed, other things constant.
C)the extra satisfaction from consuming a good increases slowly as more of a good is consumed, other things constant.
D)when the extra satisfaction from consuming a good becomes negative, total utility starts falling, other things constant.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as more units of a good are consumed, the extra satisfaction or utility gained from each additional unit will eventually decrease. In other words, the first few units of a good consumed provide greater marginal utility than later units. This is because our needs and wants are finite, and as we consume more of a good, we may become satiated or reach a point of diminishing returns. Choice A is incorrect because total utility can continue to increase even as marginal utility decreases, as long as the marginal utility is positive. Choice C is incorrect because the extra satisfaction from consuming a good does not necessarily increase as more is consumed. Choice D is incorrect because total utility can still be positive even if the marginal utility is negative.

The Law of Diminishing Marginal Utility States That