The law of equi-marginal utility is an extension of the law of diminishing marginal utility. This law is called the law of substitution or the law of maximum satisfaction. It is obvious that the law of diminishing marginal utility is applicable only to a single want with one commodity in use. But, in reality there may be a number of wants to be satisfied at a time, and, these various wants are to be satisfied with several goods. To analyse, such a situation, one has to extend the law of diminishing marginal utility and such an extended form is called the law of equi-marginal utility.
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