Law of marginal utility
Law diminishing marginal utility states that when consumer consume the particular commodity contineously then the utility of each succesive unit of commodity goes diminishing. In other words when the consumer consume the commodity again and again contineous basis then his utility of each succesive unit of commodity goes decline.
For example If a man is very hungry and if consume a apple then he gain some util(satisfaction)and if he consume one more apple the util of the next apple goes down and its decline after each successive consumption of apple.
1.The utility is measured in cardinal number ex 1,2,3....
2.Standard unit of consumption ex one glass of water not a spoon.
3.The utility of a commodity is independent.
4.Continious consumption of a commodity.
5.There is no change in the quality of a commodity.
6.The consumer is a rational consumer.
7.It is assume that utility is measurable in monetary terms.
1.When marginal utility increases the total utility is increases at increasing rate.
2.When marginal utility decreases the total utility is increasing at decreasing rate.
3.When marginal utility is negative the total utility start decline.
4.When marginal utility is zero the total utility is maximum.
5.Total utility is the summation of marginal utility and marginal utility is change in total utility.
Assumption of law of marginal utility
1.The utility is measured in cardinal number ex 1,2,3....
2.Standard unit of consumption ex one glass of water not a spoon.
3.The utility of a commodity is independent.
4.Continious consumption of a commodity.
5.There is no change in the quality of a commodity.
6.The consumer is a rational consumer.
7.It is assume that utility is measurable in monetary terms.
Relationship between MU(marginal utility) and TU (total utility)
1.When marginal utility increases the total utility is increases at increasing rate.
2.When marginal utility decreases the total utility is increasing at decreasing rate.
3.When marginal utility is negative the total utility start decline.
4.When marginal utility is zero the total utility is maximum.
5.Total utility is the summation of marginal utility and marginal utility is change in total utility.
