Explain the law of diminishing marginal utility?

Question

Answer

Marginal utility is the additional satisfaction derive from the consumption of a commodity. Law of diminishing marginal  utility state that  as we increase the number of consumption of a commodity,  additional satisfaction goes on declining each time.

Answer

In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a good or service is the change in the utility from an increase in the consumption of that good or service.

In the context of cardinal utility, economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. Therefore, the fall in marginal utility as consumption increases is known as diminishing marginal utility.

Answer

This law is the fundamental law in economics. It states that as the consumer consumes additional unit of a commodity the satisfaction (utility) he gets from each additional unit of a commodity goes on declining. In other words the more of a commodity consumer consumes the less he want to have more of it.

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