Notion of diminishing marginal utility

The notion of diminishing marginal utility refers to the principle that as a person consumes more of a good or service, the additional satisfaction (utility) gained from each extra unit tends to decrease. For example, when you eat a piece of cake, the first slice brings you significant pleasure. However, by the third or fourth slice, you may enjoy it less, as your hunger diminishes. This concept helps explain consumer behavior and decision-making, indicating that people balance their choices based on the satisfaction they expect to receive from each additional unit of consumption.