A. total utility decreases as consumption increases
B. marginal utility increases as consumption increases
C. marginal utility decreases as consumption increase
D. marginal utility decreases as consumption decreases
Correct Answer:
Option C – marginal utility decreases as consumption increase
Explanation
Diminishing marginal utility explains that as a person consumes an item or a product, the satisfaction or utility that they derive from the product reduces as they consume more and more of that product. This means that the satisfaction that is meant to be derived from consuming an additional unit of a commodity reduces as you consume more of that commodity.
