Diminishing marginal utility explains why

A) the income effect exceeds the substitution effect.
B) the substitution effect exceeds the income effect.
C) supply curves are upsloping.
D) demand curves are downsloping.

Diminishing Marginal Utility

A principle stating that as a person consumes more units of a particular good or service, the satisfaction (utility) gained from consuming each additional unit decreases.

Income Effect

Variations in income for either a person or the economy as a whole, and how these variations influence the demand for specific goods or services.

Substitution Effect

A shift in consumer preferences resulting from alterations in the comparative costs of different products, causing buyers to switch from one product to another.