Question

Which statement best illustrates the concept of diminishing marginal utility?

1. Some consumers will receive less satisfaction from consuming pizza than from consuming hamburgers.

2. A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice.

3. A decrease in the price of slices of pizza will cause consumers to buy more slices for lunch, because they can afford to buy more.

4. As one consumes more slices of pizza for lunch, one would be willing to pay a higher price for additional slices.

Answer 1

The statement that demonstrates diminishing marginal utility is the one addressing reduced satisfaction from consuming subsequent slices of pizza, aligning with the principle that satisfaction decreases with each additional unit consumed after a certain point.

Step-by-step explanation:

The statement that best illustrates the concept of diminishing marginal utility is: A typical consumer will receive less satisfaction from consuming the third slice of pizza for lunch than from the second slice. This particular statement directly reflects the principle that as a consumer consumes more of a good, the additional utility from each subsequent unit consumed diminishes. The concept implies that there is a decreasing level of satisfaction that a consumer experiences with each additional consumption after a certain point.

For example, the first slice of pizza may bring immense satisfaction, especially if hungry. The second slice still brings pleasure but maybe slightly less so. By the third slice, the consumer may start to feel full, resulting in even less additional satisfaction from that slice compared to the second one.