In marginal analysis, the law of diminishing marginal utility explains why a consumer's demand curve for a good is typically downward sloping: as consumption of the good increases, what happens to marginal utility?

• A. Marginal utility increases with each additional unit consumed, so the consumer is willing to pay more for additional units.
• B. Total utility decreases as consumption increases, so the consumer stops consuming immediately after the first unit.
• C. Marginal utility remains constant as consumption increases, so willingness to pay does not change with quantity.
• D. Marginal utility decreases with each additional unit consumed, so the consumer is willing to pay less for additional units.

Answer: (D)

Verified step by step guidance

1. Understand the concept of marginal utility, which is the additional satisfaction or benefit a consumer receives from consuming one more unit of a good or service.
2. Recognize the law of diminishing marginal utility, which states that as a consumer consumes more units of a good, the marginal utility derived from each additional unit tends to decrease.
3. Connect this decrease in marginal utility to the consumer's willingness to pay: since each additional unit provides less extra satisfaction, the consumer values it less and is willing to pay a lower price for it.
4. Relate this behavior to the shape of the demand curve: because willingness to pay decreases with quantity, the demand curve slopes downward, reflecting lower prices at higher quantities demanded.
5. Summarize that the downward sloping demand curve in marginal analysis is explained by the diminishing marginal utility, which causes consumers to reduce their willingness to pay as consumption increases.