Gossen’s first law is known as.
a. Law of equi-marginal utility.
b. Law of diminishing marginal utility
c. Law of demand.
d. Law of Diminishing returns.
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Gossen’s first law is also known as the Law of Diminishing Marginal Utility and hence, the option ‘b’ is the correct answer.
Gossen was a famous economist of Germany, who coined several laws in economics.
This law states that the usefulness of a thing seems to decrease after a certain point of time as it is used continuously.
It also states that if a thing is overused, its marginal value may even tend to become negative, which means the user may want to discard it totally.
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