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WAEC Economics 2010 Question 12

Question 12

Theory of Consumer Behaviour

The law of diminishing marginal utility states that, the more a commodity is consumed the

  1. A.higher the satisfaction derived from an additional unit.
  2. B.higher the price to be paid.
  3. C.lower the quantity supplied.
  4. D.lower the rate of increase in the total utility derived.
Show the answer and explanation

Answer: D (lower the rate of increase in the total utility derived.)

Explanation

Each extra unit adds less satisfaction, so total utility rises at a slower and slower rate.