Question

What Are the Assumptions of the Law of Diminishing Marginal Utility?

Answer 1

Following are the assumptions of the law of diminishing marginal utility:

1. The quality of the successive units of goods should remain the same, changes in the quality of the product may not be helpful in proving the law.
2. Consumption of goods should be continuous, any long gap in the consumption will alter the law.
3. There should be no change in the mental outlook of the consumer.
4. The number of units of the good in question should not be very less, it will result in a less accurate inference of the law.

Also read:

• Total Product Average Product and Marginal Product
• Difference Between Total Utility and Marginal Utility
• Consumer Equilibrium Utility Analysis
• Difference Between Cardinal and Ordinal Utility Study Material

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