Answer:
Utility: Utility is the power or capacity of a commodity to satisfy human want. It is the want satisfying power of a commodity. Law of Diminishing marginal utility: This law states that with the consumption of every additional unit of a commodity, marginal utility derived from the successive unit goes on diminishing. Utility from first glass of water for a thirsty man is maximum, utility from second glass is lesser and third is still lesser and thus intensity of want goes on falling. Demand for a commodity depends on its utility or usefulness to the consumer. If the consumer gets more satisfaction, he will pay more and if he gets less satisfaction, he will buy the additional units at lower price. A consumer matches price with marginal utility before buying the additional unit of a commodity.
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