Scenario 5.1
The demand for noodles is given by the following equation: Q = 20 - 4P + 0.2I - 2P x . Assume that P = $8, I = 200, and P x = $10.
-The law of diminishing marginal utility states that:
A)the marginal utility of the last unit consumed of any good is less than the marginal utility of all other products consumed.
B)as more of a good or service is consumed, the marginal utility derived from it, relative to other products, increases.
C)as more of a good or service is consumed, the marginal utility derived from it decreases.
D)as more of a good or service is consumed, the marginal utility derived from it, relative to other products, remains the same.
E)the marginal utility of all products consumed must be equal.

Question

Quizplus · Accepted Answer

The law of diminishing marginal utility states that as more of a good or service is consumed, the marginal utility derived from it decreases. This means that as a consumer consumes more noodles, the satisfaction derived from consuming each additional unit will decrease.

Scenario 5.1 The Demand for Noodles Is Given by the Following Equation