Answer to Question #273288 in Microeconomics for tayyba

Question

Use diminishing marginal utility to explain why millionaires often do not have many homes, even if they can afford it

Answer 1

The law of decreasing marginal utility states that, other things being equal, as consumption increases, the marginal utility received from each additional unit decreases.

Millionaires often do not have so many houses, even if they can afford it, because they also quickly become saturated

and satisfied with the house and other goods, and the usefulness of each additional one decreases.