Question

Jenny likes chocolates. One​ day, a friend offers her a chocolate bar and she is extremely happy on receiving it. As the day​ progresses, many other people also buy her chocolate. As she gets more and more​ chocolates, her excitement on receiving each bar is seen to gradually lessen. Which economic principle is reflected in this​ example?

Answer 1

Answer: Law of diminishing marginal utility

Step-by-step explanation: In simple words, law of diminishing marginal utility states that as a consumer consume more of a good or service then the marginal benefit he or she receives from the additional consumption keeps on decreasing.

In the given case, Jenny's excitement keeps on decreasing with every chocolate she receives after a certain point of time.

Hence we can conclude that the given case illustrates law of diminishing marginal utility.