critically examine the law of equimarginal utility
Answers
In the real world, a consumer may purchase more then one commodity. Let us assume that a consumer purchases two goods X and Y. How does a consumer spend his fixed money income in purchasing two goods so as to maximize his total utility? The law of equi-marginal utility tells us the way how a consumer maximizes his total utility.
ANSWER:-
Law of equimarginal utility :- in real life a consumer normally spend his income on the purchase of more than one commodity in such a situation law of equi marginal utility is applied to get maximum satisfaction .
in the case of two commodities we can see the consumer is in equilibrium when the consumer get equal satisfaction by consuming the boat boat commodities but this is happened when the law of equi marginal utility will be applied by this law will explain when the marginal utility of good acts by the marginal utility by the price of that commodity is equal to marginal utility why by the price of eye
in case of two commodities x and y the consumer will be equilibrium when
Mux/Px=MUy/Py.