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The law of diminishing marginal utility says that as you consume more of something the satisfaction that you get from each additional unit .?
Wiki User
∙ 7y ago
Auuumptions:
This law is based on following assumptions and this law is applicable only if these assumptions are true. There are following:
1: Continuous use: It is assumed that the unit of commodity should be used continuously. If there is interval between the consumption of the same units then this law will not applicable.
2: Reasonable units: It is also assumed that the units of commodity which are used should be suitable and reasonable. if the units are too small, then law will not be operate.
3: Nature of commodity: It is also assumed that the income of the consumer should not change. Otherwise this law will not operate.
4: No Change in fashion: It is also assumed that there should be not change in fashion. If there is a sudden change in fashion then this law will not be operate.
5: No change in prices of substitutes: There should be no change in prices of substitutes. If the price of substitute change then demand of the commodity increases and this law will not be true.
6: No change in taste: There should be no change in the taste of consumer. For example if a consumer develops the taste of wine, then every next unit of wine increase marginal utility, which is against of our law.
7: No change in weather: Another assumption is that the weather will be remains unchanged. If weather changed then demand of certain commodity changes and this law will not be operated.
8: Rare Collection: The law does not apply in the case of rare collections. If a person has a hobby of collecting rare coins, the larger number he collects the greater will be his happiness, whereas according to this law it should be less and less,
Wiki User
∙ 13y ago
Wiki User
∙ 9y agoThe Law of Diminishing Marginal Utility is also known as the law of consumption, by which less satisfaction is derived as more units of an asset are consumed. This principle is very important in understanding value in economics.
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What economic rule states that the additional satisfaction people get from consuming one more unit of a product will lessen with each additional unit they consume?
diminishing marginal utility
Write a statement that best illustrates the concept of diminishing marginal utility?
The more bags of potato chips a person eats, the less additional satisfaction the person gets from eating another bag.
What circumstances cause a firm to experience diminishing marginal returns?
As the number of new employees increases the marginal product of an additional employee will be less than the previous employee which can cause a firm to experience diminishing marginal returns.
Criticism of law of diminishing marginal utility?
the criticisma of the law of diminishing marginal utility
Why does the marginal rate of substitution diminish?
As a matter of fact, law of diminishing marginal rate of substitution conforms to the law of diminishing marginal utility. According to law of diminishing marginal utility, as a consumer increases the consumption of a good, its marginal utility goes on diminishing. On the contrary, if the consumption of a good decreases, its marginal utility goes on increasing.
The law of diminishing marginal utility or satisfaction states that each additional unit of a product consumed will increase total satisfaction at what rate?
The law of diminishing marginal utility states that the total satisfaction derived from each additional unit of a product consumed decreases as more units are consumed. This means that the rate at which total satisfaction increases diminishes with each additional unit consumed.
What economic rule states that the additional satisfaction people get from consuming one more unit of a product will lessen with each additional unit they consume?
diminishing marginal utility
What is Diminishing marginal utilty?
The more you consume, the less satisfaction you derive from each addition unit. Say you order a pizza. The more slices you eat, the more full you become. Thus, the marginal utility you receive from each additional slice is diminishing.
What is this called when a buyer purchases a good each additional item type is less satisfying than the earlier one?
This is known as diminishing marginal utility. It is the principle that the satisfaction or utility derived from consuming each additional unit of a good decreases as more of it is consumed. This concept is a fundamental principle in economics and helps explain consumer behavior.
Write a statement that best illustrates the concept of diminishing marginal utility?
The more bags of potato chips a person eats, the less additional satisfaction the person gets from eating another bag.
What circumstances cause a firm to experience diminishing marginal returns?
As the number of new employees increases the marginal product of an additional employee will be less than the previous employee which can cause a firm to experience diminishing marginal returns.
What does the law of diminishing marginal utility stands for?
This law states that with the additional consumption the satisfaction decreases. Let's take an example: Suppose you are famished and you are offered five bread pieces. The first piece of bread will give you utmost satisfaction. But the satisaction level goes down with the very piece of next bread. After fourth piece, you will not feel like having the fifth piece. This is all about law of diminishing marginal utility.
When you experience less satisfaction from eating the fourth slice of pizza than you did the first it is an example of?
The law of diminishing marginal utility
Criticism of law of diminishing marginal utility?
the criticisma of the law of diminishing marginal utility
Why does the marginal rate of substitution diminish?
As a matter of fact, law of diminishing marginal rate of substitution conforms to the law of diminishing marginal utility. According to law of diminishing marginal utility, as a consumer increases the consumption of a good, its marginal utility goes on diminishing. On the contrary, if the consumption of a good decreases, its marginal utility goes on increasing.
Explain the merits and demerits of law of diminishing marginal utility?
explain the demerits of diminishing marginal utility
What is the difference between equi-marginal utility and diminishing marginal utility?
What is the difference between equi-marginal utility and diminishing marginal utility?Read more:What_is_the_difference_between_equi-marginal_utility_and_diminishing_marginal_utility
