The Principle That "As More of a Good Is Consumed

question 207

Multiple Choice

The principle that "as more of a good is consumed, its extra benefit declines" is known as

• A) the law of demand.
• B) the law of diminishing marginal product.
• C) the law of diminishing marginal utility.
• D) the law of comparative advantage.

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Definitions:

Profit Maximization

A rephrased definition: The strategy or aim of a firm to achieve the highest profit possible, usually by adjusting outputs, prices, or production costs.

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Long Run

A period in economics where all inputs or factors of production can be varied, with no fixed factors, allowing for full adjustment to changes.

Economic Profit

The divergence between overall financial returns and comprehensive expenses, integrating both apparent and implied costs.