Question

Which of the following is not an assumption of the " law of diminishing marginal utility?

a) Cardinal measurement of utility

b) No change in consumers income

c) Different price for same commodity

d) All of the above​

Answer 1

The correct answer is option c) Different prices for the same commodity.

• The law of diminishing marginal utility follows that when all other things remain equal, the utility derived from a certain commodity decreases.
• The commodity needs to be measurable for the law of diminishing marginal utility to come true.
• There must be no change in the customer's choice or preferences. The same commodity must be consumed for a long period.