define the law of diminishing marginal utility?
- 1 decade agoFavorite Answer
Marginal utility means the satisfaction you derive out of using a commodity. Law of diminishing marginal utility means that marginal utility (satisfaction) gets lowered as you take more and more of that commodity. Take for instance, you have been starving for a day. Then satisfaction you derive out of eating a banana will be maximum as you would badly need it. The want for bananas will come diminished as you take more and more bananas as you are becoming less and lass hungry. After eating,say six bananas your stomach willl be full. Then marginal utility becomes zero.Marginal utility becomes negative as you eat the seventh banana. the law of diminishing marginal utility applies for all commodities.
- Anonymous6 years ago
Law of Diminishing Marginal Utility- The principle that as a consumer increases the cost of consumption of a good or service, the 'marginal utility' obtained from each additional unit of the good or service decreases. In other words for the first ice cream cone you get 10 units of utility. The next cone is still really good and you are happier and have 5 more units of utility. The next cone is still good but it isn't as good as The last and you only get 2 units of utility, the 4th cone will still not be as marginally good and you may get 0 marginal utility. So while your utility went from 10 to 15 to 17 each additional cone gave you less and less marginal utility.
- Anonymous5 years ago
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