Diminishing Marginal Utility 50 Sarah’s marginal utility g30 20 0 0.5 1.5 2.53.54.5 Cones/hour Chapter 5: Demand: The Benefit Side of the Market Slide 16
MB MC Chapter 5: Demand: The Benefit Side of the Market Slide 16 Sarah’s marginal utility Diminishing Marginal Utility Cones/hour Utils/cone 1 3 4.5 0 0.5 1.5 4 2.5 3.5 2 50 40 30 20 10
Translating Wants into demand a The Law of Diminishing Marginal Utility The tendency for the additional utility gained from consuming an additional unit of a good to diminish as consumption increases beyond some point Chapter 5: Demand: The Benefit Side of the Market Slide 17
MB MC Chapter 5: Demand: The Benefit Side of the Market Slide 17 Translating Wants into Demand ◼ The Law of Diminishing Marginal Utility ⚫ The tendency for the additional utility gained from consuming an additional unit of a good to diminish as consumption increases beyond some point