Question

The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of

Answer 1

decreasing marginal benefit.

Step-by-step explanation:

A consumer measures the amount of satisfaction gained by consuming a product in making a buying decision.

When a person comes a product his satisfaction increases up to a point, and from that point as consumption increases the satisfaction derived reduces.

Consumption after this point is known as decreasing marginal benefit to the customer.

This affects the customer's willingness to buy more of this product. Patronage of lemonade will reduce as the customer looks for another product to satisfy his needs.