Law of Diminishing Marginal Utility
The law of diminishing marginal utility is a law of economics stating that as a person increases consumption of one product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product. Think about eating a chocolate bar. Everyone loves chocolate right? When you eat one chocolate bar you will immediately feel satisfied and happy to have curbed your chocolate craving. But if you eat a second bar, it may stil taste good but not as yummy and satisifying as before. If you continue to eat more and more chocolate bars the less satisifed you feel and eventually you will become sick. In economics, conumers deal with this problem by consuming and purchasing a variety of products.
Posted by michelle0916 on 8/27/2009
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Marginal utility - Wikipedia, the free encyclopedia
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Diminishing returns - Wikipedia, the free encyclopedia
In economics, diminishing returns (also called diminishing marginal returns ) refers to how the marginal production of a factor of production, in contrast to the increase that would otherwise be n...
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law day; law firm; law of averages; law of contract; law of demand; law of diminishing marginal utility; law of diminishing returns; law of effect; law of large numbers; law of markets; law of nations...
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The "Law of Diminishing Marginal Utility" states that for any good or service, the marginal utility of that good or service decreases as the quantity of the good increases, ceteris paribus. In other words, total utility increases more and more slowly as the quantity consumed increases.
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Utility analysis; A. Law of diminishing marginal utility; 1. Utility measures the want-satisfying power of a good or service. 2. Marginal utility is the additional or incremental satisfaction (utility) a consumer receives from acquiring one additional unit of a product.
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Law of Diminishing Marginal Utility - Definition of Law of Diminishing Marginal Utility on Investopedia - A law of economics stating that as a person increases consumption of a product - while keeping consumption of other products constant - there is ... Investopedia explains Law of Diminishing Marginal Utility;
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The law of diminishing marginal utility helps economists understand the law of demand and the negative sloping demand curve. The less of something you have, the more satisfaction you gain from each additional unit you consume;
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