Satisfaction
of human wants follows some very important laws and one of them is the law of diminishing
marginal utility.
The
law state that,
“As the amount of a good consumed
increases the marginal utility of that good ends to diminish.”
For
example,
Suppose, a person starts eating pieces
of bread one after another. The first toast gives him great pleasure. By the
time he starts taking the second, the edge of his appetite has been blunted and
the second toast, meeting with a less urgent want, yields less satisfaction;
the satisfaction of the third will be less than that of the second; that the
fourth less than that of the third, and so on. The additional satisfaction will
go on decreasing with every successive toast till it drops down to zero; and if
the consumer is forced to take more, the satisfaction may become negative, or
the utility may change into disutility.
The
idea will be clear frame the table 1 and the figure 1(a) given bellow:-
Unit ( Toast)
|
Total Utility
|
Marginal Utility
|
1
|
20
|
20
|
2
|
38
|
18
|
3
|
53
|
15
|
4
|
64
|
11
|
5
|
70
|
6
|
6
|
70
|
0
|
7
|
62
|
-8
|
8
|
46
|
-16
|
The
marginal utility at every step should be diminishing. It will be seen from the
table that the total utility of a quantity of a commodity is maximum when the
marginal utility is zero.
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