Which scenario best illustrates the law of diminishing marginal utility?

• A. A restaurant increases the size of its pizza slices to attract more customers.
• B. A person saves more money as they buy pizza in bulk.
• C. A consumer finds that the price of pizza decreases as they buy more slices.
• D. A person enjoys their first slice of pizza the most, but each additional slice provides less satisfaction than the previous one.

Answer: (D)

Verified step by step guidance

1. Understand the law of diminishing marginal utility: it states that as a consumer consumes more units of a good, the additional satisfaction (marginal utility) gained from each extra unit decreases.
2. Identify the key element in the problem: the focus is on how the satisfaction changes with each additional unit consumed, not on price changes or quantity discounts.
3. Analyze each scenario to see if it reflects decreasing additional satisfaction from consuming more units:
4. - Increasing pizza slice size to attract customers relates to quantity offered, not marginal utility per slice.
5. - Saving money by buying in bulk relates to cost savings, not satisfaction from consumption.
6. - Price decreasing with more slices relates to pricing strategy, not utility.
7. - Enjoying the first slice most and less satisfaction from each additional slice directly illustrates diminishing marginal utility.