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Law of Diminishing Marginal Utility

This is an economic law that states that the marginal utility received decreases as a consumer buys more units of a good. This happens because in the eyes of the consumers the value of the good diminishes for every extra unit they buy e.g. a chocolate bar. However, this does not mean that consuming an extra unit does increase total utility, just that it may not add as much utility as the previous units.

Below illustrates the declining utility for a consumer for every additional chocolate bar they consume but total utility continues to increase.

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