Define utility. Explain the Law of Diminishing Marginal Utility. - Vidyadip

Question

Define utility. Explain the Law of Diminishing Marginal Utility.

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Answer

Utility refers to the amount of satisfaction derived from consumption of a good.
As consumer goes on consuming more and more units of a good, utility obtained from consuming each extra unit goes on falling. Ultimately it may become zero or even negative. This is the law of diminishing marginal utility.

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