Law Of Diminishing Marginal Utility
This is the premise on which buffet-style restaurants operate. They entice you with "all you can eat," all the while knowing each additional plate of food provides less utility than the one before. And despite their enticement, most people will eat only until the utility they derive from additional food is slightly lower than the original.
For example, say you go to a buffet and the first plate of food you eat is very good. On a scale of ten you would give it a ten. Now your hunger has been somewhat tamed, but you get another full plate of food. Since you're not as hungry, your enjoyment rates at a seven at best. Most people would stop before their utility drops even more, but say you go back to eat a third full plate of food and your utility drops even more to a three. If you kept eating, you would eventually reach a point at which your eating makes you sick, providing dissatisfaction, or 'dis-utility'.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
law of diminishing marginal utility — Econ. the law that for a single consumer the marginal utility of a commodity diminishes for each additional unit of the commodity consumed. * * * … Universalium
law of diminishing marginal utility — Econ. the law that for a single consumer the marginal utility of a commodity diminishes for each additional unit of the commodity consumed … Useful english dictionary
law of diminishing marginal utility — noun In economics, the theory there is a general decrease in the utility of a product, as more units of it are consumed … Wiktionary
Marginal utility — In economics, the marginal utility of a good or service is the utility gained (or lost) from an increase (or decrease) in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that… … Wikipedia
marginal utility — Econ. the extra utility or satisfaction derived by a consumer from the consumption of the last unit of a commodity. [1920 25] * * * In economics, the additional satisfaction or benefit (utility) that a consumer derives from buying an additional… … Universalium
Marginal use — As defined by the Austrian School of economics the marginal use of a good or service is the specific use to which an agent would put a given increase, or the specific use of the good or service that would be abandoned in response to a given… … Wikipedia
Diminishing returns — Economics … Wikipedia
Utility — This article is about the economic concept. For other uses, see Utility (disambiguation). Part of a series on Utilitarianism … Wikipedia
Marginal rate of substitution — In economics, the marginal rate of substitution is the rate at which a consumer is ready to give up one good in exchange for another good while maintaining the same level of utility. Contents 1 Marginal rate of substitution as the slope of… … Wikipedia
Marginal cost — A typical marginal cost curve with marginal revenue overlaid In economics and finance, marginal cost is the change in total cost that arises when the quantity produced changes by one unit. That is, it is the cost of producing one more unit of a… … Wikipedia