In marginal analysis, diminishing marginal benefit implies that as a person consumes more of a good, the additional benefit from each extra unit

• A. always exceeds the marginal cost for all quantities consumed
• B. increases with each additional unit consumed
• C. decreases with each additional unit consumed
• D. remains constant regardless of how many units are consumed

Answer: (C)

Verified step by step guidance

1. Understand the concept of marginal benefit: it refers to the additional satisfaction or utility a consumer gains from consuming one more unit of a good or service.
2. Recall the principle of diminishing marginal benefit (or diminishing marginal utility), which states that as a person consumes more units of a good, the additional benefit gained from each extra unit tends to decrease.
3. Analyze each option in the context of diminishing marginal benefit: it cannot be that the marginal benefit always exceeds marginal cost for all quantities, nor that it increases with each additional unit, nor that it remains constant.
4. Recognize that the correct interpretation is that the marginal benefit decreases with each additional unit consumed, reflecting the diminishing returns in satisfaction.
5. Summarize that diminishing marginal benefit means the consumer values each additional unit less than the previous one, which is why the marginal benefit curve slopes downward.