Consuming each additional unit of a commodity decline its ______________.
Answer & explanation
Correct answer: option 1
The answer is Marginal utility.
Marginal utility is the additional satisfaction that a consumer gets from consuming one more unit of a good or service. The law of diminishing marginal utility states that as the quantity of a good or service consumed increases, the marginal utility of each additional unit decreases. This means that the first unit of a good or service will provide the most satisfaction, and each subsequent unit will provide less satisfaction than the previous one.
In other words, consuming each additional unit of a commodity will decline its marginal utility. This is because consumers become satiated as they consume more of a good or service, and they are less willing to pay for additional units.