We know that marginal utility first rises pretty fast, reaches a peak, and then falls because:

A. Consumers experience diminishing returns as they consume more of a particular good.
B. The law of diminishing marginal utility states that as a person consumes more units of a good or service, the additional satisfaction or utility decreases.
C. The law of supply and demand dictates that as demand increases, prices rise, leading to a decrease in utility.
D. Consumers become accustomed to the satisfaction derived from a particular good, reducing its perceived value over time.

Q&A Education