Law of Diminishing Marginal Utility

 When a person consumes a greater number of units of an item, the marginal utility
of that item decreases. This is known as the Law of Diminishing Marginal Utility. 

 Corollary, as one consumer consumes a greater number of units of a product, the

additional utility or pleasure that he gets from each additional unit of the good
continues to decline.

 It should be emphasized that the marginal utility and not the overall utility
diminishes when consumption of a product increases. When it comes to utility,
increasing overall utility decreases at a declining pace.

 The law follows two essential principles.

1. When a person consumes more and more units of commodities, the intensity
of his desire for the products declines. When saturation is achieved, the
marginal utility of commodities becomes zero. Zero marginal utility of
commodities indicates that the person has everything that he needs.

2.  When a person consumes increasing amounts of a good, the intensity of

desire for the item reduces, but if the total number of units dedicated to the
fulfillment of other needs yields as much satisfaction as the original amount
of the good, marginal utility would not have declined.
 The total and marginal utilities that one person gets from drinking ParperBoat a day
are listed in the Table for Diminishing Marginal Utility.
 Total utility generated by the user consuming ParperBoat: 10 units. The marginal
utility is 10 since this is the first bottle.
 With consumption of two bottles per day the total utility goes up to 20, while
marginal utility goes down to 8.
 As the consumption of PaperBoat rises to five bottles per day, marginal value (i.e.
usefulness) from the extra cups keeps on decreasing.
 However, as the number of bottles of PaperBoat drank each day rises to six, it
instead provides a negative marginal utility equal to -2. Consuming too many bottles
of PaperBoat may lead him to suffer from constipation or stomach discomfort.
 Therefore, more bottles of PaperBoat given to one person results in disutility rather
than pleasure, hence proving the law of Diminishing Marginal Utility.