The law of DMU holds true when the following assumption are satisfied
1.Standard unit of measurement is used-
If the unit of measurement is very large or very small then the law will not hold for examples rice measured in grams, water in drops, diamonds in kilograms
2.Homogeneous commodity-
All units of commodity consumed are homogeneous and perfect substitute.
3.contineous consumption-
The law of DMU holds only when the consumption of successive units of a commodity is without a time gap.
4.Mental and social condition of the consumer must be normal.
The law will hold when consumer mental condition is normal.His income and tastes are unchanged and behavior is rational.
1.Standard unit of measurement is used-
If the unit of measurement is very large or very small then the law will not hold for examples rice measured in grams, water in drops, diamonds in kilograms
2.Homogeneous commodity-
All units of commodity consumed are homogeneous and perfect substitute.
3.contineous consumption-
The law of DMU holds only when the consumption of successive units of a commodity is without a time gap.
4.Mental and social condition of the consumer must be normal.
The law will hold when consumer mental condition is normal.His income and tastes are unchanged and behavior is rational.
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