agreed or disagreed . law of DMU is based on various assumption
Answers
Yes, the law of DMU depends on assumptions.
Assumptions of DMU:
Cardinal measurement of utility: it is assumed that utility can be measured and it can be expressed in numerical terms as 1, 2, 3, etc.
Monetary measurement of utility: it is assumed that utility can be measured in monetary terms.
Continuous consumption: it is assumed that consumption is a continuous process. For example, if one ice-cream is consumed in the morning and another in the evening, then second ice-cream may provide equal or higher satisfaction.
No change in quality: quality is assumed as uniform and constant.
Fixed income and prices: it is assumed that income of the consumer and prices of the goods are assumed to be constant.
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