Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-If a consumer purchases more of a product, then most likely the marginal utility of _____.
A)that product decreases
B)that product remains the same
C)other products decrease
D)other products increase
E)that product increases

Question

Quizplus · Accepted Answer

This is a basic principle of economics known as the law of diminishing marginal utility. As a consumer purchases more of a product, the satisfaction (or utility) that they receive from each additional unit of that product decreases.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation