Tuesday, July 31, 2012

Diminishing marginal utility is indicated by the downward slope of which of the following:A. Supply curve B. Demand Curve C. Elastic Supply Curve...

Marginal utility in the field of economics refers to the
extra value that each subsequent unit of a product is able to provide to the
consumer.


A decreasing marginal utility means that as
consumers get more of a product each subsequent unit provides a lesser value to them
than the previous unit. This is the primary reason why the price has to decrease in
order to increase the number of units of a product purchased by
consumers.


So the demand curve which is the graph of price
of the product by quantity demanded is a downward sloping curve due to the diminishing
marginal utility.

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