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Define the concept of utility stating the law of diminishing marginal utility with an example

Define the concept of utility stating the law of diminishing marginal utility with an example

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Utility refers to the satisfaction derived by a consumer by consuming certain quantities of a good. Utility is a subjective concept.

The law of diminishing marginal utility states that when we consume more units of the same good, then everything remaining constant, the subsequent units of the good would provide less and less utility to the consumer. For example, if the first cup of coffee provides 20 units of utility, the second one would probably provide 18 units, the third unit 16 units and so on.

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