Concept of Utility and Approaches of Utility Analysis

Definition of utility:Utility of a commodity is its want-satisfying capacity. The more the need of a commodity or the stronger the desire to have it, the greater is the utility derived from the com...

Concept of Total Utility and Marginal Utility

Total Utility: It is the total  satisfaction derived from consumption of given quantity of a commodity at a given time. In other words, It is the sum total of marginal utility.  Marginal Utility: I...

The law of Diminishing Marginal Utility

The law of diminishing marginal utility was first developed by a German economist Hermann Heinrich Gossen in 1854. It is also known as the first law of Gossen. This law was modified and popularized...

Exceptions/Limitations of the Law of Diminishing Marginal Utility

There are various exception/limitation of the law of diminishing marginal utility which are as follows:1. Homogeneous units: There should be a single commodity with homogeneous units wanted by an i...

Importance of the Law of Diminishing Marginal Utility

The major points of importance the law of diminishing marginal utility are as follows: 1. Basis of Economic Laws:The Law of Diminishing Marginal Utility is the basic law of con­sumption. The Law of...