According to the Law of Diminishing Marginal Returns
Marshall stated the law thus the additional benefit which a person derives from a given increase of the stock of a thing diminishes with every increase in the stock that he already has. Demand refers to the quantity of a commodity demanded at a certain price other things remaining the same.
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We can illustrate the effects in the same way as we did for the salt tax using the supply and demand model we are.
. The study found that it reduced the consumption of butter and related products butter blends margarine and oil by between 15 and 20. Thus demand is based on the law of diminishing marginal utility. According to a study of the Danish fat tax it corresponded to about 22 of the average butter price in the year before the tax.
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