Diminishing marginal utility
A) occurs when the additional utility for each good declines as consumption increases.
B) is the additional satisfaction derived from consuming one more unit of a good or service.
C) is the combination of goods and services that maximizes utility for a given income.
D) occurs when a consumer buys more of a good as a result of a relative price change.
E) occurs when there is a change in purchasing power as a result of a change in the price of a good.

Question

Quizplus · Accepted Answer

Diminishing marginal utility occurs when the additional utility or satisfaction for each good declines as the consumption of that good increases. This means that while the first few units of a good may provide high levels of satisfaction, each additional unit will provide less and less satisfaction until eventually, the consumer reaches a point where they derive no additional satisfaction from consuming more of the good.

Diminishing Marginal Utility