Question 12
Theory of Consumer BehaviourDiminishing marginal utility implies that
- A.total utility decreases as consumption increases
- B.marginal utility increases as consumption increases
- C.marginal utility deceases as consumption increases
- D.marginal utility decreases as consumption decreases
Show the answer and explanation
Answer: C (marginal utility deceases as consumption increases)
Explanation
The law says each additional unit consumed gives less extra satisfaction than the one before.