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Question

Law of diminishing marginal utility states that when more and more units of a commodity are consumed, marginal utility ___________.

A
begins to increase
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B
remains constant
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C
begins to decrease
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D
becomes zero
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Solution

The correct option is C begins to decrease
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 becomes zero or negative.

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