1 Answer | Add Yours
Marginal utility in the field of economics refers to the extra value that each subsequent unit of a product is able to provide to the consumer.
A decreasing marginal utility means that as consumers get more of a product each subsequent unit provides a lesser value to them than the previous unit. This is the primary reason why the price has to decrease in order to increase the number of units of a product purchased by consumers.
So the demand curve which is the graph of price of the product by quantity demanded is a downward sloping curve due to the diminishing marginal utility.
We’ve answered 288,345 questions. We can answer yours, too.Ask a question