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According to the law of diminishing marginal utility, _________?
  • a)
    Additional consumption always yields extra utility
  • b)
    Additional consumption leads to lower average total utility
  • c)
    Additional consumption always yields negative utility
  • d)
    After a point any addition in the consumption causes a reduction in total utility.
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
According to the law of diminishing marginal utility, _________?a)Addi...
According to the Law of Diminishing Marginal Utility, marginal utility of a good diminishes as an individual consumes more units of a good. In other words, as a consumer takes more units of a good, the extra utility or satisfaction that he derives from an extra unit of the good goes on falling.
It should be carefully noted that is the marginal utility and not the total utility than declines with the increase in the consumption of a good. The law of diminishing marginal utility means that the total utility increases but at a decreasing rate.
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Most Upvoted Answer
According to the law of diminishing marginal utility, _________?a)Addi...
Yes d is correct as consumption of every additional unit of goods tends to lower the total utility
Free Test
Community Answer
According to the law of diminishing marginal utility, _________?a)Addi...
Because law of Diminishing Marginal Utility states that when more and more consumption increases then satisfaction will decreases
so, MU is negative then TU starts falling.
when MU is negative that is the point where reduction in TU
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According to the law of diminishing marginal utility, _________?a)Additional consumption always yields extra utilityb)Additional consumption leads to lower average total utilityc)Additional consumption always yields negative utilityd)After a point any addition in the consumption causes a reduction in total utility.Correct answer is option 'D'. Can you explain this answer?
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