Concept of Law of Diminishing Marginal Utility:
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The law of diminishing marginal utility explains an ordinary experience of a consumer.

If a consumer takes more and more units of a commodity, the additional utility he derives from an extra unit of the commodity goes on falling.

Thus, according to this law, the marginal utility decreases with the increase in the consumption of a commodity.

When marginal utility decreases, the total utility increases at a diminishing rate. Therefore, this law is called The Law of Diminishing Marginal Utility.

It describes a familiar and fundamental tendency of human nature.

Definition according to Marshall, “The additional benefit which a person derives from a given increase of his stock of a thing diminishes with every increase in the stock that he already has”.