Units of quantity consumed Total utility Marginal utility
0 - -
1 10 10
2 15 5
3 17 2
4 18 1
5 18 0

This table illustrates the law of _________

  • A Increasing returns
  • B Diminishing returns
  • C Diminishing marginal utility
  • D Increasing total utility

The correct answer is C. Diminishing marginal utility

The correct answer is C. Diminishing marginal utility.

The law of diminishing marginal utility states that as a person consumes more units of a good or service, the additional (or marginal) utility from each unit decreases.

This means that the satisfaction or benefit that a person gets from consuming one more unit of something declines as they consume more of it.

In the table, we can see that the total utility increases as the quantity consumed increases, but at a decreasing rate.

The marginal utility, which is the change in total utility divided by the change in quantity, decreases as the quantity consumed increases.

For example, when the quantity consumed increases from 0 to 1, the marginal utility is 10/1 = 10.

When the quantity consumed increases from 1 to 2, the marginal utility is 5/1 = 5.

When the quantity consumed increases from 4 to 5, the marginal utility is 0/1 = 0.

This shows that the additional utility from consuming one more unit of the good or service decreases as the person consumes more of it.

Therefore, the table illustrates the law of diminishing marginal utility.

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