A. The supply curve slopes downward
B. Your utility grows at a slower and slower rate as you consume more and more units of a good.
C. The elasticity of demand is infinite
D. None of the above
Correct Answer:
Option B – Your utility grows at a slower and slower rate as you consume more and more units of a good.
Explanation
The law of diminishing marginal utility states that the satisfaction derived from consuming successive units of a commodity will diminish as the total consumption of the commodity increases. In other words, the total utility increases as more of a commodity is consumed but increase at a diminishing rate.
