Which economic principle suggests that as a consumer buys more of a product, the additional satisfaction decreases?

The principle that suggests as a consumer buys more of a product, the additional satisfaction decreases is known as the Law of Diminishing Marginal Utility. This concept states that with each additional unit of a good or service consumed, a consumer typically experiences a decline in the incremental satisfaction or utility derived from that additional unit.

For instance, if you are eating slices of pizza, the first slice may bring a certain level of satisfaction. The second slice might provide a bit less satisfaction, and by the time you reach the third or fourth slice, the added pleasure from consuming each additional slice decreases. This phenomenon helps explain consumer behavior and demand curves, as it influences how much of a product people are willing to buy at various prices.

In contrast, the Law of Demand relates to the relationship between price and quantity demanded, indicating that as prices drop, demand typically increases. The Law of Supply explains how producers are willing to sell more of a product at higher prices. Lastly, the Law of Increasing Returns refers to a situation where an increase in input leads to a proportionally greater increase in output, which is not directly related to consumer satisfaction levels.