Question

the marginal utility for all product exhibit diminishing marginal return in true for

Answer 1

The law of diminishing marginal utility states, that as a consumer goes on consuming more units of a good or a service, the utility or the benefit which he derives from each additional unit is less than the previous one. For example, if a person consumes one unit of milk and goes on consuming more units, the net benefit from additional consumption would be lesser than the previous this is because he is satisfied after consumption of a single unit and additional unit do not satisfy his need or want.

However, one critical element to be remembered is that the law of diminishing marginal utility holds true only in case of homogeneous products which cannot be differentiated and are consumed at the same time without any changes in tastes and preferences of the consumer or their income. If the taste and preferences of the consumers change, they may desire additional quantities even when they might have consumed it previously.

Similarly, if the products are luxury goods such as gems or gold or diamonds, the additional consumption of the same will not lead to reduced utility. An additional source of income would help in additional consumption and the consumer would stay satisfied as he is not spending more proportion of his income to get the same product which he earlier was.

Thus, we can conclude by saying, that diminishing marginal utility has certain pre conditions such as consumer tastes and preferences, income pattern and time remaining the same without which it fails to come in existence. Also, there are certain types of goods which are rate example coins or are luxurious example gold, silver, diamonds etc which do not exhibit the properties of this law.

Please feel free to ask your doubts in the comments section if any.