Maharashtra State BoardHSC Commerce 12th Board Exam
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The Law of Equi-marginal Utility is Based on Certain Assumptions. - Economics

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The law of equi-marginal utility is based on certain assumptions.

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Solution

Yes, I do agree with the statement because that the law of equi marginal utility is based on assumption as following are the assumption to this law.

Assumptions:
  • It is assumed that cardinal measurement of utility is possible.
  • It is assumed that comparison of utility is possible.
  • The behaviours of consumer is rational and his aim is to get maximum utility.
  • Prices of commodities are given and remain constant.
  • A consumer has limited amount of income to spend.
  • Taste, habits and preferences of a consumer remain same.
  • Consumer consumes two commodities at a time.
  • Consumer spends his entire income on the two commodities.
  • Marginal Utility of money remains constants.
  • Units of commodities are of standard size.
  • Commodities are divisible according to requirement.
Concept: Law of Equi-marginal Utility
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