The "Law" of Diminishing Marginal Utility Implies That the

question 102

Multiple Choice

The "law" of diminishing marginal utility implies that the

• A)first unit of a good consumed will contribute most to the consumer's satisfaction.
• B)last unit of a good consumed will contribute most to the consumer's satisfaction.
• C)total utility is negative.
• D)total utility is constant as more units are consumed.
• E)marginal utility of a good diminishes over time.

---

Definitions:

Price-leadership Model

A market strategy where one dominating firm sets the price for its product, and other firms in the industry follow suit, often observed in oligopolistic markets.

Dominant Firm

A company that has a large portion of market share in its industry, giving it significant power to influence market conditions and prices.

Economic Incentives

Monetary or other rewards used to motivate individuals or entities to perform certain actions beneficial to economic objectives.

Differentiate

The method of differentiating a product or service to enhance its appeal to a specific target audience.