is diminishing marginal utility in economics true?
The idea of diminishing marginal utility states that, as you get more and more of some good or service, the utility of the next unit of that good or service that you get has less utility for you.
In general, economists believe that this is true. Think of it this way: if you are hungry and you receive a hamburger, that has great value to you (assuming you like hamburger). Now you get another one, but you're not as hungry as you were so it's less valuable. Now what if you keep getting more? Probably hamburger number 5 will have very little value for you over and above what you got from #4.
This makes sense theoretically. However, it is impossible to actually measure marginal utility so we can't really know for sure.
The law of diminishing marginal utility holds that the utility or satisfaction we derive from consumption of each additional unit of a product or service diminishes with increase in total quantity.
Validity of this law is very much supported by our personal experience and observation also. If I eat a piece of cake I like, I enjoy it very much. If I can get get another pice of the cake I will be happy to eat that also. But the enjoyment or satisfaction I derive from the second piece will be much less than that derived from the first piece. Ahter that I may enjoy a third piece also but I am not likely to be very keen on eating that third piece. May be I will eat it only if a friend insist. But when it comes to the third piece, I am very clear in my mind. I just tont want anything to do with cakes.
Only flaw in this theory is that it assumes that utility can be measured. This is not really true as utility or satisfaction is very much a subjective matter. Scientists and economists have tried to devise methios of measuring things like utility, but such methods of measurement are far from perfect. Still the is is usually possible to compare different utilites and arrange them in a orddder of increasing or decreasing utilies, and in this way it is possible to establish the validity of the law of diminishing marginal utility.
Diminishing marginal utility assumes carsdinal measurement of utility derived by consumer. Marshall Proposed the theory.
Cardinal measurement assumption is true based on observation