The point at which it is no longer advantageous to buy in bulk is known as _____.

Question: The point at which it is no longer advantageous to buy in bulk is known as _____.

Answer: The correct answer is “The principle of diminishing marginal utility.”

Diminishing Marginal Utility is a concept that is employed in the field of microeconomics to explain the idea that the fulfilment an individual will acquire from using a certain good or service will decrease with the increment in the quantity used. About bulk purchases, this principle may suggest having a level at which the marginal utility of the additional unit of the commodity consumed in the same quantity is less than the consumption cost. It describes the psychological behaviour of the consumer in which after a few quantities no additional increase in perceived or derived utility is payable by the consumer over and above the cost of getting that quantity. This principle explains why consumers normally have a certain amount of bulk purchases at hand for a discounted price.