We the people spends our money on our needs, satisfaction and comfort. Also sometimes we take extra unit of that needs if our satisfaction is not fulfilled. We never hesitate to pay extra money if our satisfaction exceeding our budget but when the budget exceed the satisfaction level of extra unit consumption,we think whether to go for it or not. Basically if we tell the marginal utility goes on diminishing.
Marginal utility defined as the extra amount of satisfaction that we get from the consumption of one extra unit. Marginal utility is a useful factor, it helps to determine how much a consumer will buy. It goes towards positive when consumption of extra unit increases the total utility and going towards negative when consumption of extra unit decreases the utility.
Let's take an example of a man who is very thirsty and buy 4 glass of juice to drink. When he will take the first glass of juice, he will be very satisfy, it has a higher benefit for him. But when he will take the second glass of juice probably he will not as much as satisfy as the first one and the third one carry very less utility then the second glass also and the individual is now no more thirsty .
Now the fourth glass of juice gone through a diminished marginal utility and it is difficult to drink by the individual. Finally it cannot be consumed and results in a negative utility.
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