Which statement is TRUE if the principle of diminishing marginal utility applies?

A) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives the same marginal utility.
B) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie gives less marginal utility.
C) When a customer at the Pie Palace continues to eat more pie,each additional piece of pie lowers total utility.
D) The total utility of pie is at a maximum,while the marginal utility of pie is still increasing.

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Christina Messinger · Accepted Answer

Final Answer : B, Explanation :  The principle of diminishing marginal utility states that as consumption of a good or service increases, the additional satisfaction gained from each additional unit of the good or service decreases. Therefore, option B is true as each additional piece of pie gives less marginal utility. Option A, C and D are incorrect based on the principle of diminishing marginal utility.

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