As more of a product is consumed, total utility increases up to a point at which
A) marginal utility increases at an increasing rate.
B) marginal utility increases at a constant rate.
C) marginal utility decreases.
D) marginal utility will initially decrease, then increase.

Question

Quizplus · Accepted Answer

According to the law of diminishing marginal utility, as more of a product is consumed, the marginal utility (the additional satisfaction gained from consuming one more unit) decreases. This ultimately leads to a point at which the marginal utility becomes negative, meaning that consuming one more unit actually decreases total utility. Therefore, choice C is the correct answer.

As More of a Product Is Consumed, Total Utility Increases