Law of Diminishing Marginal Utility

Other thing remaining constant, the more of one goods that one obtains in a specific period of time, the less the additional utility derived from an additional unit of good. Utility diminishes overtime, the shorter the time period the more quickly marginal utility diminishes.

Example:

Restaurant chains like Barbeque Nation often provide unlimited food scheme to attract customers. They are very well aware of the Economic concept ‘Law of Diminishing Marginal Utility’, where others things remaining constant, addition of single unit of good consumed increases the utility derived from it initially but decreases eventually. In this case consumer begins to eat and derive utility from the addition of food consumption but it eventually starts decreasing from the consumption. According to the assumption how much a consumer can eat, Barbeque Nation has set their price accordingly to earn more profit.