Question

Marginal utility _______ with increase in consumption.

• A. increasing
• B. diminishes
• C. remains constant
• D. never ending

Answer 1

The correct option is B diminishes

Marginal Utility is the measurement of satisfaction level of a consumer which he gains from the use of successive units of commodity. It is the wants satisfying capacity of a commodity. At the starting phase it increases very fast with the use of each additional unit of commodity but gradually it starts declining because continuous use of same commodity makes consumer more and more satisfied. After that there a point comes when satisfaction is at fullest where MU is zero and if it is consumed further then MU starts diminishing.