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Sagot :
The marginal utility from each extra unit decreases as consumption rises, according to the law of declining marginal utility. 1. If it becomes fully unfavorable to consume another unit of any product, the marginal utility can fall into negative utility.
What do declining returns and diminishing marginal utility mean?
According to the economic principle known as the rule of decreasing marginal returns, adding more factors of production will actually lead to lesser improvements in output once a certain level of capacity has been reached.
Give an example of how the law of declining marginal utility works?
According to the law of diminishing marginal utility, as we consume more of a good, the amount of enjoyment it provides decreases with each new unit. Marginal utility is the improvement in utility brought about by using an additional unit of a good.
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