ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The principle of diminishing marginal utility states that the satisfaction we gain from buying a product lessens as we buy more of the same product. As we use more of a product, we are not willing to pay as much for it. Therefore, the demand curve is downward sloping.

Detailed explanation-2: -Law of diminishing marginal utility is based on psychological law that as more and more units of a commodity is consumed, marginal utility derived from every successive unit will decline in respect to all goods with a few exception.

Detailed explanation-3: -According to the law of diminishing marginal utility, as the consumption of good increases the additional amount of happiness the good provides the consumer decreases.

Detailed explanation-4: -When we consume more units of a particular good, marginal utility from consumption of new units will decrease until it eventually becomes negative. A good’s total utility increases with diminishing returns until it becomes constant and starts falling.