Which of the following statements is true because of the law of diminishing marginal utility?
A) When a customer continues to eat more pie at the Pie Palace, each additional piece of pie gives a larger amount of marginal utility.
B) When a customer continues to eat more pie at the Pie Palace, each additional piece of pie gives a smaller amount of marginal utility.
C) The marginal utility of a piece of pie is maximum when the total utility of pie is zero.
D) The total utility of pie is at a maximum while the marginal utility of pie is still increasing.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as a consumer consumes more and more of a good, the marginal utility (additional satisfaction) from each additional unit decreases. Therefore, choice B is the only statement that correctly reflects this law.

Which of the Following Statements Is True Because of the Law