Law of Diminishing Marginal Utility: Concept, Assumption, Causes and Issues
Marginal Utility Case Study - Words | Cram
Note: There are two laws of utility that are often discussed together: law of diminishing marginal utility and the law of equi-marginal utility. This article explains the law of diminishing marginal utility. The law of diminishing marginal utility is an important concept to understand. It basically falls in the category of Microeconomics, but it is of equal and significant importance in our day-to-day decisions.
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The marginal utility of a commodity diminishes at the consumer gets larger quantities of it. Marginal utility is the change in the total utility resulting from one unit change in the consumption of a commodity per unit of time. This law was first developed by a German economist Hermann Heinrich Gossen. This law is also known as the first law of Gosse.