Explain, Why is the
ANS
Marginal Utility (MU) is the change in the total utility when an additional unit of the commodity is consumed. One of the basic assumptions of consumer theory is the " Law of diminishing MU". According to this law, the extra utility derived by consuming an extra unit of the good declines as the quantity of the good consumed increases. That is, the increment in utility received will fall as the quantity of the goods consumed increases.
Since, MU is the additional utility received when the quantity of the good consumed increases by an extra unit therefore because of the assumption of diminishing MU the MU will fall as the quantity of the good consumed increases by an additional unit which results to a negatively sloped MU curve.
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