LAW OF DIMINISHING MARGINAL UTILITY

When a consumer particular commodity continuously the the utility derived from each successive unit goes on diminishing respectively.

EX: we are providing five apple to an hungry person . after eating the first one he derives certain amount of utility from it. He got high amount of satisfaction after eating that first apple . now a little of his hunger is satisfied.so when he start eating the second one the amount of utility he derived from it must be lesser then the previous one . in the very similar manner the utility decreases down .so after his hunger being satisfied we force him to eat apple then the marginal utility will decreases down and attains a –ve , when the person have not at all satisfaction.

ASSUMPTIONS

1.unit consumed must be homogeneous.

2. unit consumed must be standard sized.

3.unit consumed must be continuous.

4. only one commodity must be consumed at a time .

5. income must be constant .

6. no substitute or compliment be introduced.