What principle states that as more of a good is consumed, the additional satisfaction declines?

• A. Diminishing marginal utility
• B. Law of supply
• C. Marginal utility
• D. Consumer surplus

Answer: (A)

Diminishing marginal utility is the idea that the extra satisfaction from each additional unit of a good falls as you consume more of it. For example, the first slice of pizza might bring a lot of enjoyment, the second a bit less, and after several slices the next one adds only a small amount of extra happiness or none at all. This declining added value explains why people aren’t willing to pay as much for each extra unit as they consume more. So the principle described is exactly that the additional satisfaction declines with more consumption. The other terms don’t capture this pattern: the law of supply relates to producers and prices, marginal utility defines the extra satisfaction from one more unit but not its decline, and consumer surplus is about the gap between willingness to pay and actual price.