Define the term diminishing marginal utility

Answer 1

Diminishing marginal utility refers to the economic concept that suggests each additional unit of a good or service consumed provides less overall satisfaction or utility to an individual, as compared to the previous units consumed. In other words, as a person consumes more of a particular good, the marginal utility or satisfaction derived from each additional unit progressively diminishes. This principle is based on the idea that individuals have limited needs and preferences, leading to a decrease in the perceived value of additional units consumed over time.