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Question

Law of diminishing marginal utility states that as the consumer buys more units of a commodity _________.

A
total utility falls
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B
marginal utility falls
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C
average utility falls
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D
both total and marginal utility falls
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Solution

The correct option is B marginal utility falls
Law of diminishing marginal utility states that as consumer will increase its consumption of a commodity, the marginal utility derived from every successive unit of consumption will decrease and a situation may come when marginal utility is zero or negative.

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