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Category - Economics

Which law in economics states that consumers have a threshold for how much of a product they will buy, even if they can afford to buy more?
  1. Law of markets
  2. Law of diminishing marginal utility
  3. Law of demands
  4. Law of diminishing marginal returns
Explanation
Answer: B - The law of diminishing marginal utility states that a consumer will only buy so much of a product even when they can afford to buy more. For example, an avid gum consumer may readily buy a value package of gum containing 10 standard packs, but they're not going to go to a warehouse store and buy a flat of chewing gum even if it only costs $60, because (in this case) having that much gum is impractical.
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