A basic hypothesis of marginal utility theory is that the utility a consumer derives from successive units of a good diminishes as total consumption of the good increases.This hypothesis is known as
A)the utility theory of demand.
B)the law of diminishing marginal utility.
C)utility maximization.
D)the law of diminishing total utility.
E)the paradox of value.

Question

Quizplus · Accepted Answer

The hypothesis that the utility a consumer derives from successive units of a good diminishes as total consumption of the good increases is known as the law of diminishing marginal utility. Marginal utility theory holds that consumers will continue to consume a good or service until the marginal utility of an additional unit is less than or equal to its price, which leads to the law of demand. This theory is fundamental to understanding consumer behavior and decision-making in microeconomics.

A Basic Hypothesis of Marginal Utility Theory Is That the Utility