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Question
With the increase in the consumption of units of a given commodity the marginal utility ________.
With the increase in the consumption of units of a given commodity the marginal utility ________.
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Solution
The correct option is A diminishes
Marginal Utility is the measurement of satisfaction level of a consumer which he gains from the use of successive units of commodity. At the initial stage it increases very fast with the use of every successive unit of commodity but continuous consumption of the same makes it declining. After that a point comes when satisfaction is at fullest where MU is zero and if it is consumed further then MU starts diminishing. In other words, with increase in the consumption of units of a given commodity the marginal utility diminishes.
Marginal Utility is the measurement of satisfaction level of a consumer which he gains from the use of successive units of commodity. At the initial stage it increases very fast with the use of every successive unit of commodity but continuous consumption of the same makes it declining. After that a point comes when satisfaction is at fullest where MU is zero and if it is consumed further then MU starts diminishing. In other words, with increase in the consumption of units of a given commodity the marginal utility diminishes.
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