Question

Read the following statements carefully and choose the correct alternatives given below:
Statement 1: Total utility decreases when marginal utility is negative.
Statement 2 : Law of demand is based on the law of diminishing marginal utility. Alternatives:
a) Both the statements are true.
b) Both the statements are false.
c) Statement 1 is true and Statement 2 is false
d) Statement 2 is true and Statement 1 is false​

Answer 1

Answer:

The Law and Marketing

The Law and MarketingMarketers use the law of diminishing marginal utility because they want to keep marginal utility high for products that they sell. A product is consumed because it provides satisfaction, but too much of a product might mean that the marginal utility reaches zero because consumers have had enough of a product and are satiated. Of course, marginal utility depends on the consumer and the product being consumed.

Answer 2

Answer:

c) Statement 1 is true and Statement 2 is false

Explanation:

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