00:01
According to the law of diminishing marginal utility, which was the following is true.
00:07
So we need to understand what diminishing marginal utility is.
00:12
It states the amount of satisfaction provided by the consumption of every additional unit of a good decreases as we increase consumption of the good.
00:20
So we basically have this downward sloping line.
00:27
And an example would be with pizza.
00:29
So as we consume increasing numbers of slices of pizza, we derive less satisfaction from each slice.
00:43
You can see that we do end up having negative values for marginal utility.
00:53
So we can get negative satisfaction if we consume too much of one product.
01:01
So this is under the branch of macroeconomics, which gives.
01:07
Deals with economic behavior of individual variables such as factors of production individuality, returns to factors of production, the law of demand, and law of supply.
01:28
This was propagated by the economist alfred marshall.
01:34
It's essential to understanding consumer buying behavior, setting the prices of various commodities, and matching the forces of demand and supply in an economy or market.
01:48
The very first unit consumed in the beginning gives maximum satisfaction...