The Law of Diminishing Marginal Utility applies to which of the following?

✅Explanation:
The Law of Diminishing Marginal Utility states that as a person consumes more of a good or service, the additional satisfaction (marginal utility) they derive from each additional unit decreases. This principle applies to money because as a person acquires more money, the value they place on each additional dollar diminishes. The first few dollars earned might be spent on essential needs, providing significant satisfaction, but as income increases, additional dollars might be spent on less essential items, leading to less satisfaction.
Key Points
-HH Gossen formulated the Law of Diminishing Marginal Utility (DMU).
-He formulated this law in 1854.
Important Points
-Marginal Utility is the change in total utility due to a one-unit change in the level of consumption.
-Law of Diminishing Marginal Utility
-It states that as a person consumes an item or a product, the satisfaction or utility that they derive from the product declines as they consume more and more of that product.
-In other words, the additional utility gained from an increase in consumption decreases with each subsequent increase in the level of consumption.
-Demand curves are downward-sloping in microeconomic models since each additional unit of a good or service is put toward a less valuable use.
-Marketers use the law of diminishing marginal utility because they want to keep marginal utility high for products that they sell.