Marginal Utility and the Law of Diminishing Marginal Utility
Marginal utility is how the usefulness of an additional unit that is consumed changes. The law states that with other products' consumption kept constant, the marginal utility that a person derives from consuming a product decreases with increase in the use of that product (Krugman & Wells, 2015). Therefore marginal utility can decline to that of negative value. This situation can be handled by consuming numerous amounts of different goods.
Application in the Scenario of Winning Free Pizza Delivery
Therefore, for a scenario whereby you get surprised with an email that says you have won a whole month delivery from your favorite pizza delivery company for both lunch and supper, the law of diminishing marginal utility will apply. On the first day of the pizza delivery, I will be very excited since it is my favorite pizza and I am getting free delivery. I will be gaining a specific utility from eating the pizza coupled with the right feeling of eating my favorite pizza. On the tenth day, my enthusiasm will be low and my appetite for the pizza almost satisfied. This satisfaction is explainable by the decreased marginal utility caused by the consumption of a similar commodity over a long time. By the 30th day, my appetite will be fully satisfied, and even the love for the pizza turned into some disgust.
Comparison with Winning Free Gasoline
The case on winning free gasoline from a gasoline company for every single day of the year from any station belonging to the company is a different case of the diminishing marginal utility. The excitement on the first day, the tenth day, and the thirtieth day are all the same or almost equal. The reason because gasoline is different in that we consume the first mile and the last mile of the gas in nearly an identical measure. To get to my destination, I will need enough fuel, and there will always arise more targets and more future demands. The provision of the freedom to take any amount and from any place renders the case of the free pizza delivery and the free gasoline different.
Application in the Sale of Commodities
The law of diminishing marginal utility is usable in the sale of commodities. The rule shows there is a more strict price to quantity correlation apart from the simple cost and price formulas.
References
Krugman, P., " Wells, R. (2015). Microeconomics (4th ed.). New York, NY: Worth Publishers. Kaplan.vitalsource.com. Retrieved from https://kaplan.vitalsource.com/#/books/9781464144820/
