John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25

John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke, or does he show increasing marginal utility for Coke?

No, he doesn't show diminishing marginal utility. Yes, he shows increasing marginal utility for Coke.

Explanation:

The law of diminishing returns states that the marginal or addition satisfaction or utility derived from the consumption of a product increase until a pint and then starts to  decrease.

Units         Total utility       Marginal utility

1                    10                          10

2                   25                         15

3                   50                         25

After 3 bottles, John does not show diminishing marginal utility as the marginal utility (as shown above) continues to increase with each additional bottle of coke consumed.

What are the given options so i may
Alot of credit card rewards

Related Posts