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Byju's Answer
Standard XII
Economics
Value Added Method
Give Reason o...
Question
Give Reason or explain the following:
Limitations of the law of DMU.
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Solution
Limitations of the law of DMU are:
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.
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Give Reason or explain the following:
Practical Significance of law of DMU.
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What are shortcomings or limitations of the law of DMU ?
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Answer the following questions.
What are the limitations / Shortcomings of the law of DMU ?
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State with reason whether you agree or disagree.
The law of DMU could be explained with example and diagram.
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State with reason whether you agree or disagree.
There are no criticisms to the law of DMU.
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