The law of diminishing marginal returns relates to?

A. total utility
B. average utility
C. total product
D. marginal utility

Correct Answer: Option D

D. marginal utility

Explanation

Marginal utility is the additional satisfaction a consumer gains from consuming one more unit of a good or service. As a consumer consumes more units of a product, the marginal utility derived eventually drops.

This relates to the law of diminishing marginal returns which states that, there will be a decrease in the marginal output of a production process as the amount of a single factor of production is incrementally increased, while the amounts of all other factors of production stay constant.