Excessive Consumption Of a Thing Decreases its Utility

In our day to day life, we come across a situation where the needs and desire for any product get decreases and at some point in time it totally diminishes. The product may be edible, non-edible, goods or commodities. This is referred to as Law of Diminishing Marginal Utility.But before understanding this concept, one must understand what exactly Utility is.

A utility is an economic term which refers to the total satisfaction an individual receives from consuming a good or service. It may be cardinal or ordinal. Therefore Law of Diminishing Marginal Utility identifies the experience of every consumer after consuming a product. To explain this concept I have taken my real life example below.

On last weekend after shopping as I was very hungry I went to Dominos and purchased one large sized pizza. Now as I was very hungry, therefore consuming the first slice of pizza gave me positive utility and at the same time, the first slice of pizza has the highest benefit. After which while consuming the second slice of pizza, my appetite was satisfied as I was not hungry like before and therefore the second slice gave me less benefit and enjoyment in compared to the first. After this, the third slice of pizza gave me less utility as I was not hungry anymore.

Now coming to the fourth slice, I can say that at this point I experienced Diminishing Marginal Utility as it was difficult for me to consume that slice of pizza as I was totally full. However, after the consumption of four slices of pizza, consuming the fifth slice resulted in negative utility. Therefore upon consumption of products or goods, all the five slices show the decreasing marginal utility.

Thus we can say that as a human being we are never satisfied with what we have and we always aim for something more. But at the same time when we get all things beyond our needs at some point in time, it becomes less satisfactory to us.