What economic law states that as a person consumes more of a good, the additional satisfaction from each new unit decreases?
Show answer
Law of diminishing marginal utility
This explains why the first slice of pizza is incredibly satisfying, but the fifth slice might make you feel sick. In economics, this law is the reason why demand curves typically slope downward; you're only willing to pay less for each additional unit.
Also asked as:
- What economic principle explains why the additional benefit derived from a good declines as its consumption increases?