The law of diminishing marginal utility explains why
Answer Details
The law of diminishing marginal utility states that as an individual consumes more and more of a good or service, the additional satisfaction or utility that they derive from each additional unit of the good or service decreases. This helps explain why the slope of a normal demand curve is negative - as the price of a good or service increases, individuals will consume less of it because the marginal utility of each additional unit is decreasing. Conversely, an abnormal demand curve slopes upwards because the marginal utility of each additional unit is increasing. The law of diminishing marginal utility is also used to explain why consumers may shift from consuming inferior goods to normal goods as their income increases, as the marginal utility of inferior goods decreases with higher income levels.