ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The law of diminishing marginal utility explains that as a person consumes more of an item or product, the satisfaction (utility) they derive from the product wanes. Demand curves are downward sloping in microeconomic models since each additional unit of a good or service is put toward a less valuable use.

Detailed explanation-2: -In simple terms, the law of diminishing marginal utility means that the more of an item that you use or consume, the less satisfaction you get from each additional unit consumed or used.

Detailed explanation-3: -According to the law of diminishing marginal utility, when marginal utility diminishes, total utility increases at a decreasing rate. Marginal utility is the rate of change in total utility, thus, it decides the slope of total utility curve.

Detailed explanation-4: -Diminishing marginal utility and the law of demand The law of diminishing marginal utility helps us understand the law of demand. Because consumers will derive less happiness or benefit from additional units of a good, they will only be willing to buy a larger quantity if the price decreases.