Question

The law of Diminishing Marginal Utility explains economic behaviour of a rational consumer. (State whether the statement is TRUE or FALSE)

Answer 1

this statement is true

Answer 2

Answer:

True

Explanation:

The law of Diminishing Marginal Utility explains economic behaviour of a rational consumer. - True

The law of decreasing marginal utility states that as a customer consumes more and more commodity units in succession, the marginal usefulness obtained from the consumption of each extra commodity unit falls. Such behaviour is a rational behavior. As the customer has more of a commodity, the intensity of want for extra units continues to decline. When the intensity of want decreases, no rational customer would want extra commodity units.