Diminishing Marginal Utility

Diminishing marginal utility is an economic concept that explains how each additional unit of a good or service provides less satisfaction than the previous one. For example, eating a slice of pizza may be very enjoyable, but by the fourth or fifth slice, the pleasure diminishes. This occurs because our desire or need for that item decreases as we consume more. Essentially, the more we have of something, the less value or happiness each additional unit brings. This principle helps explain consumer choices and demand behaviors in markets.