Question

Carefully explain the principle of diminishing marginal utility using a relevant example.

Answer 1

Answer - The principle of dimimishing marginal utility states that as we keep on consuming more of a good , the utility derived from each additional unit , goes on diminishing. We feel less use of something , as we use it more and more. Hence the graph can be derived as the downward sloping in which MU decreases with the increase in consumption.

Example - suppose , we start eating food ( chapati) . As we go on eating more and more chapati , our stomach goes on filling , and hence at last we do not need any more chapati as our want has been accomplished. We feel less need or our we eat utility decreases . This is dimimishing marginal utility