Discussion Do You Maximize Your Utility?
Please answer in 1 page the following:
As we’re well aware, vending machines are used to sell snacks and beverages, whereas newspapers are sold out of a box that allows anyone to take more than one paper.
- How does the concept of diminishing marginal utility explain the different distribution techniques for newspapers vs. snacks and beverages?
- Identify two additional examples of an item whose diminishing marginal utility is high.
Remember: Marginal utility is the change in total utility that results from a one-unit increase in the quantity of a good consumed; diminishing marginal utility is the general tendency for marginal utility to decrease as the quantity of a good consumed increases.