Define Diminishing Marginal Utility

question 13

Essay

Define Diminishing marginal utility.

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Definitions:

Demand

Refers to the desire and willingness of consumers to purchase goods and services at different prices.

Income Elasticity of Demand

An indicator of the variation in the demand for a product as a result of changes in the income levels of consumers.

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, and vice versa.