how the law affects pricing
the law of diminishing marginal utility affects how businesses price their goods and services because the first quantity of something has the most utility consumers are usually willing to pay more for it for example a store might have a deal on backpacks for sale one backpack for 30 two for 55 or three pairs for 75 a person buying backpacks can get the best cost per backpack if they buy three not all buyers will want three backpacks even though they are the best deal however anyone who is shopping for backpacks needs at least one so the first backpack has the highest price after that because the marginal utility of each additional backpack decreases the business must decrease the cost per unit in order to entice shoppers to purchase more units limitations of the law of diminishing marginal utility