Because Successive Units of a Good Produce Less and Less

question 226

Multiple Choice

Because successive units of a good produce less and less additional satisfaction, the price must fall to encourage a buyer to purchase more units of the good. This statement is most consistent with which explanation for the law of demand?

• A) diminishing marginal utility
• B) the rationing function of prices
• C) the substitution effect
• D) the income effect

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Definitions:

Potential Adjustment

A modification or change that may be required or proposed for future consideration.

Number of Employees

The total count of individuals working for a company or organization, including both full-time and part-time workers.

Time-Driven Activity-Based Costing

A costing method that assigns costs to products based on the estimated amount of time resources are used.

Customer Service Department

A division within a company that handles inquiries, complaints, and orders from customers, aiming to provide satisfaction and support.