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