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What is diminishing marginal utility?

The concept of diminishing marginal utility is covered in this short revision video. The Law of Diminishing Marginal Utility states that if the consumption of a good or service increases, the satisfaction derived gradually increases but at a decreasing rate, to the point where it reaches zero.

How do consumers handle the law of diminishing marginal utility?

Consumers handle the law of diminishing marginal utility by consuming numerous different goods, which keeps the utility for each one high. The law of diminishing marginal utility makes several assumptions:

What is the law of reducing marginal utility?

The Law of Diminishing Marginal Utility states that if the consumption of a good or service increases, the satisfaction derived gradually increases but at a decreasing rate, to the point where it reaches zero. Total satisfaction is maximised when marginal utility is zero.

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