September 19, 2021 Comment off

Would the law of diminishing marginal utility apply to a good that is “free,” such as unpolluted air or a public beach?

“Considering what you have read about the impact of diminishing marginal utility on a consumer’s decision making and the impact of diminishing marginal returns on a producer’s short-run costs, post a response to the following: -Would the law of diminishing marginal utility apply to a good that is “free,” such as unpolluted air or a public beach? Why or why not? -Is it possible to have a situation with this “free” good where marginal utility may be negative? Give examples to explain your answer. -Provide an example of diminishing returns. Make the distinction between your fixed and variable resources. -Why is diminishing returns a short-run issue? Can it be wise to produce more units despite experiencing diminishing marginal returns?