Question on: WAEC Economics - 2015
The law of diminishing marginal returns relate to?
A
total utility
B
average utility
C
total product
D
marginal utility
Ask EduPadi AI for a detailed answer
Correct Option: D
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 with 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.
Add your answer
Please share this, thanks!
No responses