Answer to Question #255921 in Microeconomics for Manu

Question

Explain the law of deminshimg marginal utility with the help of a table and diagram

Answer 1

Marginal utility is the change in the total utility resulting from one unit change in the consumption of a commodity per unit of time.

Followings are the some assumptions of the law of diminishing marginal utility : 

(i) It is assumed that utility can be measured and a consumer can express his satisfaction in quantitative terms such as 1, 2, 3... etc. 

(ii) Consumption of reasonable quantity.

(iii) Continuous consumption. 

(iv) Monetary measurement of utility. 

(v) No change in quantity. 

(vi) Rational consumer. 

(vii) MU of money remains constant. 

(viii)Independent utilities. 

(ix) Fixed income price.

This law can be explained with the help of the above schedule and diagram: