Question

state and explain the law of diminishing marginal utility.explain its assumptions

Answer 1

Hey mate...... Here is ur answer........ .....
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Law of Diminishing Marginal Utility States that when more and more units of a commodity is consumed then the marginal Utility derived from every additional unit starts to reduce and at a point it becomes negative or zero....this law applies on all the goods and services so it is also known as fundamental law or psychological law.....
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............Example......
suppose u r taking a frooti it may possible that in starting u likes to have it more but definitely after continue the consumption a point will come when u will not want to have it more then u stops to take it.....this is law of diminishing marginal Utility...
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when a consumer don't want to have a one more marginal consumption.....
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Assumptions of Law of DMU........
1 consumption of the commodity should be continuously .....not after some breaks....................
2 only standard unit of a commodity is to be consumed...... not a tablespoon of somewhat.........
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This law has only one exception ......that is it does not apply on those things which can't we estimate as a good or service...... MONEY is the perfect example of it's exception.....
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DONE..........Hope It Hepls You...........
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