Question

Give Reasons or Explain.
The law of Equi-Marginal Utility refers to Consumer's Equilibrium.

Answer 1

• The law of equi-marginal utility is an extension of the law of DMU. It states that with the limited that a person has, he aims to spend it on different commodities and earn maximum and equal satisfaction from them.
  
• He should such a combination of goods so that the utility derived from the last unit of the goods are the same.
  
• Thus, it aims to establish equilibrium at that point where the consumers get maximum satisfaction by consuming a particular combination of goods.