The principle of diminishing marginal utility:
A)refers to the tendency of total utility to increase until an individual's budget is no longer constrained.
B)refers to the tendency of marginal utility to decline as the amount of consumption of a good or service increases.
C)indicates that,if a good is inferior,less of it will be purchased when income falls.
D)assumes all goods are normal.

Question

Quizplus · Accepted Answer

Diminishing marginal utility refers to the tendency of the additional satisfaction or utility obtained from a good or service to decline as more is consumed. In other words, as an individual consumes more of a good or service, the additional utility gained from consuming each additional unit decreases. This is due to the fact that the individual's needs and wants are progressively satisfied with each additional unit, leading to a decrease in the rate at which utility is obtained.

The Principle of Diminishing Marginal Utility