Question

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? Multiple Choice diminishing marginal utility the rationing function of prices the income effect the substitution effect

Answer 1

The above statement is most consistent with the diminishing marginal utility.

What is diminishing marginal utility?

Diminishing marginal utility refers to the decline in additional satisfaction derived from the consumption of more and more units of goods.

Hence, the above statement is most consistent with the diminishing marginal utility.

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