Question

limitations of law of diminishing marginal utility ​

Answer 1

Answer:

Implies that the law of diminishing marginal utility cannot be applied to misers. This is because they derive more and more utility from more and more of any good. Utility is a feeling of satisfaction, pleasure, or happiness. The demand of a good depends on the amount of utility derived by a consumer from that good.

Answer 2

Answer:

Limitations of the law of diminishing marginal utility are as follow:

• It is assumed that the tastes, habits, fashion, and income remains constant. But this is not true realistically.
• Income of the consumer is assumed is constant which doesn’t happen and thus he shifts to another good but this is not taken into consideration.
• It cannot be applied to goods like television and ACs, where there is no decrease in their marginal consumption.
• It focuses on goods which are assumed to be exactly same and gives the same level of satisfaction. Again this is not possible realistically.

Explanation:

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