Riya eats one sandwich after another. The satisfaction she gets from each additional sandwich is smaller than from the one before it. Which law of economics does this show?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Law of diminishing marginal utility
Marginal utility is the extra satisfaction from one more unit of a good. The law of diminishing marginal utility states that, as more units of a good are consumed, the marginal utility from each successive unit goes on falling.