LAW OF EQUI-MARGINAL UTILITY

LAW OF EQUI-MARGINAL UTILITY Owing to multiplicity of wants and scarcity of means wants are competitive. We have, therefore, more urgent and less urgent wants. When we are weighing in our mind whether to buy a little more or a little less of a commodity, it seems we...

Marginal Utility and Price

Marginal Utility and Price It is clear from the above discussion that marginal utility and price are inter-related. The two coincide or price measures marginal utility. The consumer stops where the price and the marginal utility are equa\. All units of the commodity...

Marginal Utility of Money

Marginal Utility of Money Does the law of diminishing marginal utility apply to money? It is said that there can be a limit to the purchase of a commodity, but there i no such limit to the acquiring of money. Money is a ene I purchasing power. It enable the purchase...

Marginal Utility

Marginal Utility Marginal utility can be defined as the change in the total utility resulting from a one-unit change in the consumption .If a commodity IH~I’ unit  time. When a man is purchasing a commodity. he is consciously or unconsciously weighing in his...

Diminishing Marginal Utility Curve

Diminishing Marginal Utility Curve In this figure 5.2, a curve MU has been drawn which slopes downward from left to right. This is the diminishing marginal utility curve. It shows that -as the quantity of (he commodity with the consumer increases, its marginal utility...

Limitations of the Law

Limitations of the Law The Law of Diminishing Marginal Utility, as enunciated above, is based on certain assumptions: (i) Suitahle Units. It is assumed that the commodity is taken in suitable units. If you begin taking water by spoonfuls when thirsty, or if you want...