Question on: JAMB Economics - 2020
The law of diminishing marginal utility indicates that if a consumer increases his consumption of a commodity continously
A
total utility must fall
B
marginal utility must fall
C
marginal utility may rise
D
marginal utility may fall even though his total utility may be rising
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Correct Option: B
The law of diminishing marginal utility states that as a consumer increases the consumption of a good or service, the marginal utility (the additional satisfaction) derived from each additional unit of the good or service decreases.
* **A.** is incorrect because total utility may still be rising even as marginal utility is falling.
* **B.** is correct because the law of diminishing marginal utility directly states that marginal utility falls as consumption increases.
* **C.** is incorrect because the law states that marginal utility *must* fall, not possibly rise.
* **D.** is partially correct, in that it describes the consumer may still be gaining additional utility, however, the key of diminishing utility is the decrease in marginal utility.
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