One slice of pizza costs $4, but an entire pizza with 8 slices does not cost $32. Explain why you think this
is the case, making reference to the principle of marginal utility.

If a slice of pizza costs $4, an entire pizza with 8 slices may cost $30 due to the law of diminishing marginal utility.

Explanation:

The marginal utility of goods and services refers to the additional satisfaction that a consumer derives from consuming or buying an additional unit of a good or service.

In Economics, The law of diminishing marginal utility states that as the unit of a good or service consumed by an individual increases, the additional satisfaction he or she derives from consuming additional units would start decreasing or diminishing as the units of good or service consumed increases.

For example, buying a pizza and eating a slice may satisfy your cravings but eating another slice of pizza wouldn't give you as much satisfaction as the first due to diminishing marginal utility.

Hence, the pizza seller would place a discount on the price of a complete pack of pizza containing eight (8) slices so as to entice his or her customers while offering them value for money being paid.

Therefore, if a slice of pizza costs $4, an entire pizza with 8 slices may cost $30 due to the law of diminishing marginal utility.

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