Question

Would you expect the marginal utility to rise or fall with the additional consumption of a good? Why?

Short answer

Yes, marginal utility falls with each additional unit of consumption.

Step-by-step solution

Step 1:Definition

In economics, total utility and marginal utility are concepts under utility that assist determine a consumer's level of satisfaction. The total utility refers to the whole amount of pleasure derived by a customer from the consumption of a specific amount of products. Marginal utility, on the other hand, refers to the additional utility gained by a consumer from the consumption of one additional unit of the good.

Explanation

According to the law of declining marginal utility, the price a customer is ready to pay for a good is determined by its marginal utility, which decreases with each additional unit of consumption.

The concept of diminishing pricing is intimately related to the law of diminishing marginal utility. Consumers are willing to pay lesser dollar amounts for more of a thing when its utility diminishes as its usage increases.

Step 3:Conclusion

Since this is due to the fact that each unit of consumed goods creates less additional utility.