The Law of Diminishing Marginal Utility states that as more and more units of a commodity are consumed (continuously), marginal utility derived from every additional unit must decline.
This law can be explained with the help of the following Schedule :
| Units Consumed | Total Utility (TU) | Marginal Utility(MU) |
| 1234 | 10182428 | 10864 |
The above schedule shows that with the consumption of successive unit of a commodity, the level of satisfaction fall and will become negative also, or in other words, MU tends to decline as consumption of the commodity increases.
