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26 September, 05:43

John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils. Does John show diminishing marginal utility for Coke, or does he show increasing marginal utility for Coke?

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  1. 26 September, 05:47
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    No, he doesn't show diminishing marginal utility. Yes, he shows increasing marginal utility for Coke.

    Explanation:

    The law of diminishing returns states that the marginal or addition satisfaction or utility derived from the consumption of a product increase until a pint and then starts to decrease.

    Units Total utility Marginal utility

    1 10 10

    2 25 15

    3 50 25

    After 3 bottles, John does not show diminishing marginal utility as the marginal utility (as shown above) continues to increase with each additional bottle of coke consumed.
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Home » Business » John likes Coca-Cola. After consuming one Coke, John has a total utility of 10 utils. After two Cokes, he has a total utility of 25 utils. After three Cokes, he has a total utility of 50 utils.
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