ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The “Law of Diminishing Marginal Utility” states that for any good or service, the marginal utility of that good or service decreases as the quantity of the good increases, ceteris paribus. In other words, total utility increases more and more slowly as the quantity consumed increases.

Detailed explanation-2: -Diminishing marginal utility refers to the phenomenon that each additional unit of gain leads to an ever-smaller increase in subjective value. For example, three bites of candy are better than two bites, but the twentieth bite does not add much to the experience beyond the nineteenth (and could even make it worse).

Detailed explanation-3: -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-4: -Marginal utility is the enjoyment a consumer gets from each additional unit of consumption. It calculates the utility beyond the first product consumed. If you buy a bottle of water and then a second one, the utility gained from the second bottle of water is the marginal utility.