Give a brief description of the law of diminishing marginal utility and use it to explain the downward slope of the demand curve

Question

Please provide the best answer for the statement.

Answer 1

Utility is a subjective notion in economics, referring to the amount of satisfaction a person gets from consumption of a certain product. Marginal utility refers to the extra utility a consumer gets from one additional unit of a specific product. In a short period of time, the marginal utility derived from successive units of a given product will decline. This situation is known as diminishing marginal utility. The law of diminishing marginal utility can be used to explain the downsloping demand curve. Consumer wants are insatiable, in general, but wants for specific products can be satisfied. The more units of a product that a consumer obtains, the less he or she will want additional units of that product because additional units provide less and less satisfaction. The only way to get a consumer to purchase more units of a product is to drop the price. What applies to the individual consumer also applies to consumers as a group. Hence, there is an inverse relationship between price and quantity demanded.