State the essence of law of diminshing marginal utility
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The Law Of Diminishing Marginal Utility states that all else equal as consumption increases the marginal utility derived from each additional unit declines. Marginal utility is derived as the change in utility as an additional unit is consumed. Utility is an economic term used to represent satisfaction or happiness.
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Essence of Law of Diminishing Marginal Utility
The law of diminishing marginal utility states that as the amount consumed of a commodity of a commodity increases, other things remaining same, the utility derived by the consumer from the additional units ,
i.e. marginal utility, goes on decreasing.
As more and more units of a commodity are consumed, the intensity of our desire decreases.
Therefore, the utility derived from additional units decreases.
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