Correct Option: B. Decrease after a certain point Detailed Explanation: The law of diminishing marginal utility is a fundamental concept in economics that describes how the satisfaction (or utility) a consumer derives from consuming additional units of a good changes as they consume more of it. Here’s a step-by-step breakdown of this concept:

1. Understanding Utility:
2. Utility refers to the satisfaction or pleasure that a consumer derives from consuming goods and services. It is subjective and varies from person to person.
3. Marginal Utility Defined:
4. Marginal utility is the additional satisfaction gained from consuming one more unit of a good. For example, if you eat one slice of pizza, you may feel a certain level of satisfaction. If you eat a second slice, the additional satisfaction you get from that second slice is the marginal utility of that slice.
5. The Law of Diminishing Marginal Utility:
6. This law states that as a consumer consumes more units of a good, the marginal utility derived from each additional unit will eventually decrease. Initially, the first few units consumed may provide a high level of satisfaction, but as consumption continues, the additional satisfaction gained from each subsequent unit will start to decline.
7. Why Option B is Correct:
8. As you consume more of a good, the first few units typically provide a lot of satisfaction because they fulfill a strong desire or need. However, as you continue to consume, each additional unit satisfies a lesser need or desire. For instance, if you are very hungry, the first slice of pizza will give you a lot of satisfaction. The second slice will still be enjoyable, but not as much as the first. By the time you reach the third or fourth slice, the satisfaction you gain from each additional slice diminishes significantly. Eventually, you may reach a point where consuming more does not add any satisfaction at all, or may even lead to discomfort.

Why the Other Options are Incorrect:

• Option A: Increase indefinitely:
• This option is incorrect because it contradicts the law of diminishing marginal utility. If marginal utility were to increase indefinitely, it would imply that each additional unit consumed provides more satisfaction than the last, which is not the case in reality. Consumers do not experience endless satisfaction from consuming more of the same good.
• Option C: Remain constant:
• This option suggests that the satisfaction from each additional unit remains the same regardless of how many units are consumed. This is also incorrect because, according to the law of diminishing marginal utility, the satisfaction does not remain constant; it decreases as more units are consumed.
• Option D: Become negative immediately:
• This option implies that the consumption of additional units leads to negative satisfaction right away. While it is possible for marginal utility to become negative after a certain point (for example, if you eat too much pizza and feel sick), this does not happen immediately for most goods. Typically, consumers will experience diminishing returns before reaching a point of negative utility.

Example Calculation: Let’s say you consume slices of pizza and assign utility values to each slice: - 1st slice: 10 utils - 2nd slice: 8 utils - 3rd slice: 5 utils - 4th slice: 2 utils - 5th slice: 0 utils - 6th slice: -3 utils From this example, you can see that the utility from each additional slice decreases, illustrating the law of diminishing marginal utility. Common Pitfalls:

• Assuming all goods behave the same: Not all goods will exhibit diminishing marginal utility in the same way. Luxury items or addictive goods may have different consumption patterns.
• Ignoring individual preferences: Different consumers may experience varying levels of satisfaction from the same good based on personal preferences and circumstances.

Revision Summary:

• The law of diminishing marginal utility states that as consumption increases, the additional satisfaction from each unit consumed decreases.
• Marginal utility is the extra satisfaction gained from consuming one more unit of a good.
• Option B is correct because it accurately reflects the diminishing nature of utility with increased consumption.
• Other options are incorrect as they misrepresent the relationship between consumption and satisfaction.