Question

According to the concept of diminishing marginal utility, consumers will

purchase more of a good when the price falls because

Answer 1

Consumers' real income has increased.

Step-by-step explanation:

According to the law of diminishing return, customers' will buy more of a product when price falls, because a fall in price increases the real income of consumers'. They can buy more goods and services since a fall in price, increases the purchasing power of the consumers'. Increase in real income means consumers' can buy more with the same amount of money.