ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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-3: -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.

Detailed explanation-4: -Marginal utility is the added satisfaction a consumer gets from having one more unit of a good or service. The concept of marginal utility is used by economists to determine how much of an item consumers are willing to purchase.

Detailed explanation-5: -Inapplicability to certain goods: Implies that the law of diminishing marginal utility cannot be applied to goods, such as television and refrigerator. This is because the consumption of these goods is not continuous in nature.