An increase in the quantity purchased following a price cut is:

Question

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The law of diminishing marginal utility states that as a consumer consumes more of a good, the marginal utility of each additional unit decreases. However, when the price of a good is reduced, the consumer will likely buy more of it, even though the marginal utility of each unit is decreasing. This increase in quantity purchased is consistent with the law of diminishing marginal utility because the overall utility gained from consuming more of the good still outweighs the decreasing marginal utility of each unit.

An Increase in the Quantity Purchased Following a Price Cut