Explain the law of diminishing marginal utility
Lost your password? Please enter your email address. You will receive a link and will create a new password via email.
Please briefly explain why you feel this question should be reported.
Please briefly explain why you feel this answer should be reported.
Please briefly explain why you feel this user should be reported.
Marginal utility refers to additional utility obtained from the consumption of an additional unit of a commodity. To illustrate, if 10th unit yields satisfaction of 100 utils, while 11th unit yields satisfaction of 105 utils, then marginal utility derived from the 11 th unit is 5 utils.Law of diminishing marginal utility states that as consumption increases, marginal utility tends to decline. It is known as fundamental psychological law.