Which situation is consistent with the law of diminishing marginal utility?

• A. A consumer's total utility increases at an increasing rate as more units of a good are consumed.
• B. A consumer receives less additional satisfaction from each extra slice of pizza consumed during a meal.
• C. A consumer's marginal utility increases with each additional unit consumed.
• D. A consumer's marginal utility remains constant as more units of a good are consumed.

Answer: (B)

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 tends to decrease.
2. Identify the concept of total utility versus marginal utility: total utility is the overall satisfaction from all units consumed, while marginal utility is the satisfaction from consuming one additional unit.
3. Analyze each option in terms of marginal utility behavior: check if marginal utility is increasing, constant, or decreasing as more units are consumed.
4. Recognize that the law of diminishing marginal utility corresponds to the scenario where marginal utility decreases with each additional unit consumed, meaning each extra slice of pizza provides less additional satisfaction than the previous one.
5. Conclude that the correct situation consistent with the law is when a consumer receives less additional satisfaction from each extra unit consumed, reflecting diminishing marginal utility.