Question

while eating at alexs pizza by the slice restaurant, kara experiences diminshing marginal utility she gained 5 units of satisfaction from her first slice of piuzza consumed, would only recieve 2 units of satifaction from consuming a third sliceand -1 unit of satisfaction from the fourth unit at the same price. Based on this information we can conclude that

Answer 1

While eating at alexs pizza by the slice restaurant, kara experiences diminshing marginal utility she gained 5 units of satisfaction from her first slice of pizza consumed, would only recieve 2 units of satifaction from consuming a third sliceand -1 unit of satisfaction from the fourth unit at the same price. Based on this information we can conclude that

• if Alexs is to be tempted to consume more of pizza, the price of pizza need to fall.
• Secondly it also shows that with additional unit of consumption Alexs' utility or satisfaction is falling. That is if the price remains the same he will stop consume it before the satisfaction becomes negative.