Question

The law of diminishing marginal utility states that?

1) the quantity of a good demanded will rise as price is lowered, holding all other factors constant
2) as more and more units of a good are consumed, utility will decline beyond a point
3) the demand for a good will rise as price is lowered, holding all other factors constant
4) in order to maximize utility, consumers will allocate their income such that marginal utility per dollar is equal across the goods purchased

Answer 1

The law of diminishing marginal utility states that as more units of a good are consumed, the additional utility gained from each unit decreases.

Step-by-step explanation:

The law of diminishing marginal utility states that as more and more units of a good are consumed, utility will decline beyond a point. This means that each additional unit of a good consumed provides less additional utility than the previous unit. For example, the first T-shirt José picks may give him an additional 22 utils of utility, but the fourth T-shirt may only yield 18 additional utils.