LAW OF DIMINISHING MARGINAL UTILITY: The principle stating that as more of a good is consumed, eventually each additional unit of the good provides less additional utility--that is, marginal utility decreases. Each subsequent unit of a good is valued less than the previous one. The law of diminishing marginal utility helps explain the negative slope of the demand curve and the law of demand. See also | principle | cause and effect | utility | marginal utility | demand curve | law of demand | utility | marginal utility | consumer demand theory |
