ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -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-3: -The law of diminishing marginal utility holds that as we consume more of an item, the amount of satisfaction produced by each additional unit of that good declines. The change in utility gained from utilizing an additional unit of a product is known as marginal utility.

Detailed explanation-4: -Farming is the classic example of this law. Farmers usually have a finite acreage of land on which they can add an infinite number of laborers to increase crop yields. However, there is a point where an additional worker produces less of an increase in crop yields than the last worker added.