The Principle of Decreasing Marginal Benefit Means That as the Quantity

question 230

Multiple Choice

The principle of decreasing marginal benefit means that as the quantity of a good consumed

• A) decreases, its marginal benefit decreases.
• B) increases, its marginal benefit decreases.
• C) increases, its total benefit decreases.
• D) None of the above answers is correct.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, often due to market prices being higher.

Substitutes

Goods or services that can be used in place of each other, allowing consumers to switch if there is a change in price or availability.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive due to market dynamics.

Equilibrium Price

The price at which the quantity of goods demanded by consumers equals the quantity of goods supplied, resulting in market balance.