The Law of Diminishing Marginal Utility. Mathematics & Economics Term Paper (Term Paper Sample)

The Law of Diminishing Marginal Utility
Name
Institution
Abstract
This review is about an article relating to the economic principle of the Law of diminishing marginal Utility. It provides a theoretical introduction to the concept and thereafter a review of a specific newspaper article is made. In the article review, the concept of diminishing marginal return is discussed and the reasons presented by author as to why the law seems to hold are highlighted. Thereafter, critiques and the limitations of the Law are discussed and the author’s conclusions and prescriptions are then weighed against the said limitations. This review concludes by affirming that the law of diminishing marginal utility seems to hold subject to the limitations mentioned.
Key words: Inflection point, Diminishing Marginal Returns, Satisfaction
The Law of Diminishing Marginal Utility
Introduction
The law of diminishing Marginal utility states that as more and more units of a commodity are consumed, (holding the consumption of other goods constant), the satisfaction derived from the additional consumption decreases. For example, as more and more units of chocolate bars are consumed, the satisfaction level of the consumption of additional chocolate bars decreases. This is graphically represented by Suman (n.d) in Fig.4.1 and Fig 4.2 below: