Increases in total utility from the consumption of a good decrease as more is consumed. This statement is
A) the law of diminishing marginal utility.
B) the law of average utility.
C) the consumer optimum.
D) not consistent with the assumption of rational behavior.

Question

Quizplus · Accepted Answer

This statement describes the law of diminishing marginal utility, which states that as a consumer consumes more and more of a good, the additional satisfaction or utility they receive from each additional unit consumed decreases. This is a fundamental concept in microeconomics and helps explain why consumers are willing to pay more for the first few units of a good but become less willing to pay as they consume more.

Increases in Total Utility from the Consumption of a Good