Question

explain the law of diminishing marginal utility? ​

Answer 1

Answer:

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The Law of Diminishing Marginal Utility is the basic law of consumption. It explains the common experience of the consumers. It is based on one of the characteristics of human wants which states that though human wants are unlimited, each want is satiable. We can satisfy any want at a particular point of time.  Let us suppose that an individual is hungry. Let us further suppose that he was provided with apples. As he goes on consuming one apple after another, he gets complete satisfaction after the consumption of some apples, say, five apples. But the utility derived by him from successive units will decrease with every increase in the stock of the commodities. He hesitates to eat apples after the point of satiety. So the consumption of more and more apples bring less and less utility for the consumer. This is same in the case of all rational consumers.  Herman Henrich Gossen, a German economist was the first person who propounded this Law of Diminishing Marginal Utility in 1854. He stated this law as follows:  “The magnitude of one and the same satisfaction, when we continue to enjoy it without interruption continually decreases until satisfaction is reached“. Jevons described this law as Gossen’s first law of consumption. Later on, Marshall stated and developed this law on scientific basis. Marshall stated the Law of Diminishing Marginal Utility the following way. “The additional benefit which a person derives from a given increase of his stock of a thing diminishes with every increase in the stock that he already has“. Boulding stated this law as follows : “As a consumer increases the consumption of any one commodity keeping constant the consumption of other commodities, the marginal utility of the variable commodity must eventually decline”.

Explanation: