The correct answer is: Diminishing marginal utility.
Diminishing marginal utility is a concept in economics that states that as a consumer consumes more of a good or service, the additional satisfaction or utility they receive from each additional unit of consumption decreases. This is because the consumer’s needs for the good or service are being met more and more, and so each additional unit provides less and less additional satisfaction.
The law of diminishing marginal utility is one of the key concepts in microeconomics, and it has a number of important implications for the way that markets work. For example, it helps to explain why demand curves slope downward: as the price of a good decreases, consumers are willing to purchase more of it, because the additional satisfaction they receive from each additional unit of consumption is greater than the additional satisfaction they received from the previous unit.
The law of diminishing marginal utility also helps to explain why consumers are willing to pay more for goods that are scarcer. This is because the satisfaction that consumers receive from a good is not just determined by the amount of the good that they consume, but also by the scarcity of the good. When a good is scarce, consumers are willing to pay more for it because they know that they will not be able to get as much of it in the future.
The law of diminishing marginal utility is a powerful tool for understanding consumer behavior, and it has a number of important implications for the way that markets work.