Law of Marginal Utility

Law of Marginal Utility - goes on falling because utility...

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Law of Marginal Utility: The law of marginal utility was stated and developed by Menger, Marshall and others. It is the first and simplest attempt to analyze consumer behavior and to determine equilibrium: the most satisfying condition for a consumer where he can maximize his utility considering the limitations of price and income . The law suggests that the utility that a person gains from several units of the same good
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Unformatted text preview: goes on falling because utility is subjective. The law is based on the satiability characteristic of wants. This is called the Diminishing Marginal Utility (DMU) principle. Marshall has stated the DMU as follows: 1) As the stock of commodity that a person already possesses, 2) increases , 3) the additional benefit that a person receives, 4) will increase but not as fast as the stock itself....
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This note was uploaded on 11/26/2011 for the course ECONOMIC ec 201 taught by Professor - during the Fall '10 term at Montgomery.

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