Which of the following statements best explains the concept of diminishing marginal utility?
A)As I consume additional ice cream cones, each ice cream cone adds more to my total happiness than the previous one.
B)I must consume ice cream cones until I have a stomach ache.
C)As I consume additional ice cream cones, each ice cream cone adds less to my total happiness than the previous one.
D)I must maximize my consumption of ice cream cones.

Question

Quizplus · Accepted Answer

The concept of diminishing marginal utility states that as a person consumes more of a good or service, the additional satisfaction or happiness gained from each additional unit consumed diminishes. Therefore, option C best explains it as it describes a decrease in the happiness gained from each additional ice cream cone. Diminishing marginal utility states that as a consumer consumes more and more of a good or service, the additional satisfaction or happiness they receive from consuming each additional unit decreases. Therefore, option C best explains this concept. Options A and D are incorrect as they suggest that the marginal utility is increasing or constant, which is opposite to the concept of diminishing marginal utility. Option B is irrelevant to the concept of marginal utility.

Which of the Following Statements Best Explains the Concept of Diminishing