The principle of diminishing marginal utility suggests that
A) total utility falls with additional consumption.
B) total utility is usually negative.
C) the consumer will never tire of additional units of a good.
D) the rate at which utility increases diminishes as more of a good is consumed.

Question

Quizplus · Accepted Answer

The principle of diminishing marginal utility states that as more and more of a good is consumed, the additional satisfaction (or utility) that a consumer derives from each additional unit of the good decreases. In other words, the rate at which utility increases diminishes as more of a good is consumed. Therefore, choice D is correct. Choice A, total utility does not always fall with additional consumption as long as marginal utility remains positive. Choice B, total utility is not usually negative, as consumers only consume goods that bring them positive utility. Choice C, eventually the consumer will tire and receive less utility from additional units of a good, supporting the principle of diminishing marginal utility.

The Principle of Diminishing Marginal Utility Suggests That