Assumption and Importance of the Law of Equi-Marginal Utility

Assumption of the Law:

The law of equi-marginal utility is based on the following assumptions;

• The consumer is a rational economic man who seeks to maximize his total satisfaction.

• Utility is measurable in cardinal terms. 

• The consumer has a given scale of preference for the goods in consideration. He has perfect knowledge of utility derived. 

• Prices of goods are unchanged. 

• Income of the consumer is fixed. 

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