Question

The law of diminishing marginal utility states that as the stock of a commodity with the consumer _______, its marginal utility to the consumer ________.

• A. decreases; decreases
• B. increases; decreases
• C. decreases; remains unchanged
• D. increases; increases

Answer 1

The correct option is B increases; decreases

The law of diminishing marginal utility states that as the consumption increases the marginal utility derived from the each successive units tends to decline. The consumer is less willing to sacrifice one good to consume one more additional unit of another good at a higher level of consumption.