The progressive loss of satisfaction from consuming multiple units of a good is known as what?

The progressive loss of satisfaction from consuming multiple units of a good is referred to as the law of diminishing marginal utility. This economic principle states that as a person consumes more units of a specific good or service, the additional satisfaction (or utility) gained from each subsequent unit tends to decrease. For example, the first slice of pizza may bring a high level of satisfaction, while the second slice might provide less pleasure, and the third even less, demonstrating diminishing marginal utility.

This concept is critical in understanding consumer behavior and demand, as it underpins the rationale for why consumers may not continue to purchase additional units of a product if those units do not provide sufficient added value or satisfaction. It also helps explain the downward-sloping nature of the demand curve, as as prices decrease, consumers are willing to buy more of a good, but the additional satisfaction received from each unit tends to decline.

The law of demand focuses on the relationship between price and quantity demanded, which is different from the specific concept of diminishing marginal utility. The substitution effect describes how consumers may change their purchasing behavior in response to price changes relative to substitutes. The law of diminishing returns relates to production and input usage rather than consumer consumption and satisfaction. Thus, while they are important concepts in economics,