A. stops consuming more of the commodity
B. reduces the quantity consumed
C. increases the quantity consumed
D. consumes more of another commodity
Correct Answer:
Option B – reduces the quantity consumed
Explanation
Marginal utility refers to the additional satisfaction a consumer derives from the consumption of an additional unit of a product. As more and more of a product is consumed by that consumer, the utility/satisfaction he gets reduces.
Therefore, the marginal utility of a product is greater when a person has fewer of them, but as the accumulation of goods increases, the marginal utility of additional goods declines.
