Which of the following is the best reason why we typically pay a relatively low price for water?
A) Additional units of water are normally not worth much to us.
B) Because water is abundant,the total utility we receive from water is relatively low.
C) Because water is abundant,the marginal utility we receive from water is relatively high.
D) Although additional units of water are normally worth a lot to us,the supply of water is so great we refuse to pay a high price for these additional units.

Question

Quizplus · Accepted Answer

The best reason we typically pay a low price for water is that additional units of water are normally not worth much to us, reflecting the concept of diminishing marginal utility. As we consume more water, the satisfaction (utility) we gain from consuming an additional unit decreases, making us less willing to pay a high price for more water.

Which of the Following Is the Best Reason Why We