Economics Marginal Utility Questions Medium
The law of diminishing marginal social benefit states that as the quantity of a good or service consumed increases, the additional benefit or utility derived from each additional unit consumed decreases. In other words, the more of a good or service that is consumed, the less additional satisfaction or benefit society as a whole receives from consuming each additional unit. This concept is based on the idea that individuals have different preferences and needs, and as more units of a good or service are consumed, the individuals with the highest preferences are satisfied first, leaving those with lower preferences to consume the remaining units. As a result, the overall benefit to society decreases with each additional unit consumed. This law is important in understanding consumer behavior and helps explain why individuals may be willing to pay a higher price for the first few units of a good, but are less willing to pay as much for subsequent units.