According to the law of diminishing marginal utility, as the amount of

According to the law of diminishing marginal utility, as the amount of a good consumed increases, the marginal utility of that good tends to

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improve

diminish

remain constant

first diminish and then improve

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This question was previously asked in

UPSC CDS-1 – 2018

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The law of diminishing marginal utility states that as a consumer consumes more and more units of a specific good, the additional satisfaction (utility) derived from consuming each successive unit tends to decrease. While the total utility might increase initially, the rate at which it increases slows down.

Marginal utility diminishes as consumption of a good increases.

This is a fundamental concept in microeconomics and consumer theory. It explains why demand curves are typically downward-sloping – as the price of a good falls, a consumer is willing to buy more units because the marginal utility of additional units is decreasing, and the lower price compensates for this reduced marginal satisfaction. Eventually, marginal utility can become zero or even negative if consumption continues beyond a certain point.

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