Question

Okay, Smarties are good -- possibly even the best and tastiest candy in the world, but...

Okay, Smarties are good -- possibly even the best and tastiest candy in the world, but even increased consumption of this tasty candy treat is subject to the economic principle known as the.....

A. Candyland Effect

B. Law of Conspicuous Consumption

C .Law of Diminishing Marginal Utility

D .Law of Demand

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Answer #1

This principle is known as law of diminishing marginal utility and this is because of the fact that even though it is the best candy in the world, if you consume more and more the level of satisfaction would ultimately a reduced with each candy and this level of satisfaction is nothing but utility and because additional utility generated is reducing it is law of diminishing marginal utility

Therefore (c) is the answer to this question

Law of Demand is related with price and quantity demanded, topic conspicuous consumption is related with that of wealth status and there is no candyland effect which is why

(a,b,d) are wrong.

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