5 What does diminishing marginal utility have to do with the law of demand

Diminishing marginal utility refers to the utility gained for each additional unit of labor or commodity consumed, which decreases with the increase of consumption quantity under certain conditions. This explains why the demand curve is sloping downward. Because of the diminishing marginal utility, people are reluctant to buy more of the commodity unless it declines.

This also explains why, under certain conditions, the lower the **, the higher the demand.

The law of diminishing returns is one of the fundamental laws of microeconomics. It refers to the law that when other inputs are fixed, a certain input is continuously increased, and the new output will eventually decrease. Another equivalent of this law is:

The marginal output of marginal inputs decreases after a certain level.

If you open a small workshop and can produce 5 items per day, then the efficiency is 5 pieces per day. Your business is getting bigger and bigger, and you need help, so now it's 2 employees. There are too many people, chatting and missing work at work, and two people rely on each other, both hoping that they will be lazy and save effort, so the efficiency has become a day, and the output efficiency will be smaller and smaller under the condition that the incentive system such as wages remains unchanged.

Eating ice cream If a certain mm can eat ice cream, but the two just happen to be delicious, I think she must be delicious when she eats the first one.

The second one was ok.

I guess I started to hate it when I was the third one.

The fourth one is estimated to be quite annoying.

I guess she'll be the fifth. zzzzzzz

I think we can put the utility function of her level of joy and anger y y(x) where the number of ice creams is x

Obviously, the utility is diminishing

The law of diminishing marginal utility is a very significant law drawn from economics, that is, when a positive motivation increases, it will be exchanged for a certain effect, but when the motivation continues to increase, the increase in effect will be less and less, until finally, no matter how the motivation increases, the effect does not increase, which is "decreasing".

As a simple example, when you are very, very hungry, you will be very happy when you eat the first steamed bun, and when you eat the second steamed bun, you will have a sense of happiness, but it will be less than when you eat the first one, and when you eat the third, fourth or five steamed buns, the sense of happiness will grow less and less, and I guarantee that when you eat the tenth steamed bun, it will only be more painful.

This is the simplest example of the law of diminishing marginal utility.

According to the law of diminishing marginal utility, the individual's increased satisfaction decreases when he increases his consumption of the same goods and services; On the contrary, the individual's reduced satisfaction increases as he reduces his consumption of the same goods and services.

For example, people get more satisfaction from eating the second steamed bun than the third steamed bun, and the satisfaction from eating the first steamed bun is greater than that of the second steamed bun. This is because the quantity of an item consumed decreases, and people feel more about the importance of that item in meeting their needs. If the item has multiple uses, the smaller the number of an item, the more likely people are to use it to meet their most urgent and important needs.

With the increase in the number of steamed bread eaten, when you are full, the effect of eating steamed bread again may be negative, and there are many similar examples.

To put it simply, the law of diminishing marginal utility means that in the production process, the utility produced is increasing before the quantity of the main means of production increases to a certain amount. In other words, for each additional single year of production, the utility of the output also increases by one unit. However, with the continuous increase of the means of production, the utility of production is not always in an increasing trend, especially when the means of production increase to a certain quantity, the utility of production begins to decline, and this is the phenomenon of diminishing utility.

The so-called marginal utility refers to the difference in unit production efficiency that can be obtained for each increase in the unit of means of production.

For example, when you do a good job and the unit gives you a bonus as a means of encouragement, your original salary is 1,000 yuan a month, when the number of bonuses per month starts from 100 yuan and increases at a rate of 100 yuan each time, maybe every 100 yuan increases, it has a certain effect on your drum and ant hands, but when the reward reaches 1,000 yuan per month, the effect of the additional 100 yuan is obviously relatively weak. Especially when it comes to, for example, 2,000 yuan (salary of 1,000 yuan, plus a bonus of 2,000 yuan), if you are asked to work overtime and say that the bonus is increased by 100 yuan, you may simply give up this reward and choose to take a vacation or be with your family. At this point, the additional $100 will already be diminishing for you.