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Question
The law of ______ is subject to diminishing marginal utility
The law of ______ is subject to diminishing marginal utility
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Solution
The correct option is A Demand
The Law Of Diminishing Marginal Utility states that, when everything else is unchanged, as consumption increases the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed.
The Law of Diminishing Marginal Utility directly relates to the concept of diminishing prices. As the utility of a product decreases as its consumption increases, consumers are willing to pay smaller dollar amounts for more of the product. That is the higher consumption of a product leads to decline in the demand for it due to decrease in its marginal utility
The Law Of Diminishing Marginal Utility states that, when everything else is unchanged, as consumption increases the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed.
The Law of Diminishing Marginal Utility directly relates to the concept of diminishing prices. As the utility of a product decreases as its consumption increases, consumers are willing to pay smaller dollar amounts for more of the product. That is the higher consumption of a product leads to decline in the demand for it due to decrease in its marginal utility
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