Question : As per law of DMU the marginal utility from each commodity keeps on
Option 1: begins to increase
Option 2: remains constant
Option 3: begins to decrease
Option 4: becomes zero
Answer (1)
22nd Jan, 2024
Correct Answer: begins to decrease
Solution : The correct answer is (c) begins to decrease
According to the law of diminishing marginal utility (DMU), the marginal utility from each commodity begins to decrease as more units of the commodity are consumed.
The law of diminishing marginal utility states that as a consumer consumes more and more units of a commodity, the additional satisfaction or utility derived from each additional unit diminishes. In other words, the consumer experiences diminishing marginal utility.
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