Explain the law of Equi-marginal
utility:
Answers
Answer:
Law of Equi-Marginal Utility explains the relation between the consumption of two or more products and what combination of consumption these products will give optimum satisfaction. Marginal Utility is the additional satisfaction gained by consuming one more unit of a commodity
Explanation:
In simple words, it is the additional satisfaction gained by the consumption of one more unit of a commodity. It is the approximate change in the total utility resulting from a one-unit change in the consumption of the commodity. It decreases with each additional increase in the consumption of a good. You will think how?
Suppose you eat one chocolate bar. How will you feel? Happy, Right? Suppose you eat another bar. Are you happy still? Maybe. If you go for another one, is the feeling the same? No. now you don’t feel happy. Moreover, you start to feel a little sick. So as the unit of the same item goes on increasing, the marginal utility goes on diminishing.
Answer:
The law states that a consumer should spend his limited income on different commodities in such a way that the last rupee spent on each commodity yield him equal marginal utility in order to get maximum satisfaction. ...
Explanation:
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