Law of Equi-Marginal Utility

This law states that the consumer maximizing his total utility will allocate his income among various commodities in such a way that his marginal utility of the last rupee spent on each commodity is equal
Or
The consumer will spend his money income on different goods in such a way that marginal utility of each good is proportional to its price
Explanation

yet to write

Limitations of Law of Equi-Marginal Utility
  • It is difficult for the consumer to know the marginal utilities from different commodities because utility cannot be measured.
  • Consumer are ignorant and therefore are not in a position to arrive at an equilibrium.
  • It does not apply to indivisible and inexpensive commodity.

8 comments:

Adnan Majeed said...

good for introduction only

Adnan Majeed said...
This comment has been removed by the author.
saroj kumar said...

This information is enough for introduction.

Anonymous said...

Want satisfy wid dis.. Gv sm xamples

Manuj Seth said...

Good..
Thanks

Anonymous said...

BAD ENOUGH

shubham bhujbal said...

Nt enough explanation
Gv sum e.g.

Anonymous said...

it's not in detail