Read the following statements -
Assertion (A) and Reasoning (R):
Assertion: Usually, it is seen that the marginal utility increases with increase in consumption of the commodity.
Reasoning: Having obtained some amount of the commodity, the desire of the consumer to have still more of it becomes weaker.
From the given alternatives choose the correct one:
Answer & explanation
Correct answer: option 4
Assertion is wrong but the reasoning is true because usually, it is seen that the marginal utility DIMINISHES with increase in consumption of the commodity due to "Law of diminishing marginal utility". Law of diminishing marginal utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases. This happens because having obtained some amount of the commodity, the desire of the consumer to have still more of it becomes weaker.