Explain the Concept of Diminishing Marginal Utility, and Describe the Role

question 144

Essay

Explain the concept of diminishing marginal utility, and describe the role that it plays in the utilitarian argument for the redistribution of income.

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Definitions:

Internal Economies

Cost-saving measures that arise from the expansion of a firm, affecting the production process internally.

External Economies

Benefits that a firm obtains due to the actions of others or external factors, leading to reduced costs.

External Economies of Scale

Cost advantages that a firm obtains due to the expansion of the industry in which it operates, but not due to its own expansion.

Industry Size

A measure of the total production or the total number of participants in a particular industry or market.