Which of the Following Statements Describes the Principle of Diminishing

question 17

Multiple Choice

Which of the following statements describes the principle of diminishing marginal utility?

• A) Constant additions to monetary amounts result in less and less increased utility.
• B) Trivial or marginal prizes offered in a gamble reduce its monetary value.
• C) Total utility increases proportionally with every additional gamble played.
• D) The value of a gamble diminishes as more and more people become interested in it.

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Definitions:

Collusive Agreements

Secret or illegal cooperation or conspiracy, especially between businesses, in order to deceive or gain an unfair advantage.

Barrier To Entry

Economic, procedural, regulatory, or technological factors that obstruct or restrict the ability of new competitors to enter and operate within a market or industry.

Market Entry

The process or strategy by which a company enters a new market or industry.

Average Cost

The total cost of production divided by the number of units produced, often used to determine the efficiency of production.