In this article we will discuss about the law of diminishing marginal utility. Also learn about whether Marginal Utility (MU) diminishes with an increase in the stock of a commodity or not. Utility simply means the capacity of a commodity to satisfy a given desire. When we say that a commodity has high utility, all that we mean is that [...]
The below mentioned article provides an overview on the Law of Diminishing Marginal Utility. One of the characteristics of human wants is their limited intensity. As we have more of anything in succession, our intensity for its subsequent units diminishes. This generalization of satiable wants is known as the Law of Diminishing Marginal Utility. Hermann Heinrich Gossen was the first [...]
Let us make an in-depth study of the concept, assumptions, causes, limitations and issues of the law of diminishing marginal utility. Concept: A number of earlier writers like Bentham, Gossen and Marshall stated clearly the concept of diminishing marginal utility. Liebhafsky stated the principle in the following way: The satisfaction acquired from additions to one’s stock of a good diminishes. [...]