Question

Diminishing marginal utility" means that:

Group of answer choices

the individual is maximizing net utility.

each additional unit of consumption will increase utility by larger and larger amounts.

each additional unit of consumption will increase utility, but by smaller and smaller amounts.

each additional unit of consumption will decrease utility.

Answer 1

According to the law of diminishing marginal utility when the consumption of an additional unit of any goods leads to less satisfaction to compare to previous unit consumption.

Since the marginal utility is the additional utility derived by spending money on purchasing the additional unit of any goods and services.

Therefore it can be said that diminishing marginal utility" means that each additional unit of consumption will increase utility, but by smaller and smaller amounts.

Hence option third is the correct answer.