Demonstrating Diminishing Marginal Utility with a Chosen Product

How to Demonstrate Diminishing Marginal Utility

Select a product that you would willingly consume. It can be anything. Just remember, you might be taking a lot of bites, so find something you enjoy and have a good amount of. On a sheet of paper create a table (also called a schedule or ledger) with the following information: Number, Marginal Utility (MU), Total Utility (TU) Consume 1 unit of the product you have selected. 1 unit can be something measurable (like a 1/2 cup), or something less measurable (like 1 bite or 1 slice) How ever you start consuming your product, make sure to keep that methodology! Decide how many utils of satisfaction you are getting from your first consumption. Everyone has will select a different made-up number of utils. Put that number in your Marginal Utility Column. Add up the total utility. For the first line, MU = TU. Consume a second unit of your product. Decide the amount of satisfaction (utils) you are getting from the second round. If you are enjoying it more than the first, it will be a higher number than round 1 and if you did not enjoy it as much, it will be a lower number. Put that number on your table under MU and then add up your Total Utility. Continue this process until your MU <= zero. Paragraph 1 Post a description of how you worked through this process. Discuss: How did the pattern of your marginal utility change throughout? How quickly did it go up? Did it go up at a consistent rate? How quickly did it go down? Did it go down at a consistent rate? Were you able to demonstrate the law of Diminishing Marginal Utility? Why or Why not? Paragraph 2 If all products are affected in some way by the law of Diminishing Marginal Utility, what can you do as a producer of agricultural commodities to minimize the effect on the commodity you selected in the "California Bounty" discussion post? previous assignment discussion post: The most profitable agricultural produce in California is the dairy and milk products. As per the recent data, the annual market available for dairy and milk products in California is $7.34 billion and the same is expected to grow in the future. The milk and other related dairy products have market all over the globe. There are many countries which are engaged in the dairy and milk products globally. The raw milk has its demand in the market, with increasing population in the country, the milk and its by-products are getting increasing demand. The raw milk is the primary input for the dairy industry. Further, powder milk, cheese, butter can be processed from the raw milk. There are a number of challenges which a dairy farmer requires to counter on a continuous basis. The primary challenge to the dairy industry is the less margin of profit. Studies shown that the dairy margin in the California was only 13% of net sales. Many farmers are leaving the industry due to lower margin of profitability. Furthermore, without government subsidies or grants the dairy industry of California will not be able counter the global competitors. The milk and dairy industry have its market all over the globe. California is the leading producer of milk in the country and milk and dairy products of California have its demand in the country and in the global market as well. Resources: