Law of diminishing marginal utility,
Definition of Law of diminishing marginal utility:
A psychological generalization that the perceived value of, or satisfaction gained from, a good to a consumer declines with each additional unit acquired or consumed.
Even the most delicious food, for example, will appeal less and less to its consumer when he or she has had enough, and if consumption continues, sickness (disutility) will result. Consumers deal with this phenomenon by consuming a variety of goods rather than lots of one good.
The Law Of Diminishing Marginal Utility states that all else equal as consumption increases the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed. Utility is an economic term used to represent satisfaction or happiness. Marginal utility is the incremental increase in utility that results from consumption of one additional unit.
Marginal utility may decrease into negative utility, as it may become entirely unfavorable to consume another unit of any product. Therefore, the first unit of consumption for any product is typically highest, with every unit of consumption to follow holding less and less utility. Consumers handle the law of diminishing marginal utility by consuming numerous quantities of numerous goods.
Meaning of Law of diminishing marginal utility & Law of diminishing marginal utility Definition