Diminishing Marginal Utility

The Diminishing Marginal Utility explains a theory of consumer behavior when it comes to

spending based on satisfaction. This theory explains how the unlimited wants that humans have

cannot be satisfied simultaneously, but can be satisfied one want at a time. The theory

additionally explains that the increase of consumption, the benefit diminishes with every increase

of consumption. In my personal experience with this law, for example, was when I was a

cigarette smoker, and started smoking cigarettes. At first, I could smoke one cigarette, and

receive satisfaction. As time went by I had to smoke twenty cigarettes a day to get the needed

satisfaction.

Concept of Utility

In this example, the ‘utility’ is the satisfaction that was obtained from smoking. My personal

experience regarding utility was when I took my first cigarette puff, I began the habit of smoking

because of the pleasure that I received whenever I smoked. Over time, I had to smoke more

cigarettes to get satisfaction, but not really getting it. Because I kept needing to smoke, then I

realized how much the cigarettes were not serving my body or finances. It was costing me more

money to purchase cigarettes in order to get the satisfaction that I was seeking. I did not realize

that I would never achieve the real satisfaction I wanted from consuming cigarettes. I realized I

must quit smoking; although, I needed to stop, I continued to smoke. I noticed that a habit was

now forming, and I was not getting real satisfaction. A different concept of utility is satisfaction.

Consumer Behavior Factors

Based on my marginal, and total utility determines my consumer behavior when it comes to

purchasing and consuming cigarettes. When I began smoking cigarettes, I did not need that much

at first. A pack of cigarettes could last a week, then it got to the point where a pack of cigarettes

only lasted for one day. Furthermore, from my experience and example, whenever I found

myself purchasing cigarettes, I only bought the number of cigarettes that I needed to take care of

my cravings. I never purchased more than I needed for the moment because any additional

money I had went towards gas, food, etc. There came a time when I was wasting my money and

my time by consuming cigarettes. The price of money and the toll that smoking took on my body

determined that I was at a loss. My consumer behavior had to change for two reasons. I needed

to decrease consumption of this product because it was not beneficial. In satisfying my wants, I

had to harm my body with toxic fumes simultaneously. Therefore, I chose to stop smoking

cigarettes, and use my money for something useful.