Question

What are the assumptions of law of diminishing Marginal Utility?

Answer 1

Answer:

Assumptions of law of diminishing marginal utility are as follows:

Explanation:

i) Commodity should be in proper size.

ii) Commodity should be homogeneous and divisible.

iii) Consumption should be continuously.

iv) Consumer should be normal .

v) Consumer's income level should be constant.

Answer 2

1. The consumer who is consuming the goods should be logical and knowledgeable to consume every unit of goods.
2. The goods which are to be consumed should be equal in size and shape.
3. Consumer should consume the goods without time gap.
4. The consumer’s income, preference, taste and fashion should not be changed while consuming the goods.
5. To hold the law good, utility should be measured in countable units or cardinal numbers. The utility obtained from those goods is measured in ‘utils’ unit.
6. As we know that money is the measuring rod of utility, being so, marginal utility of money should remain constant during consumption of the goods.

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