Exceptions Of The Law Of Diminishing Marginal Utility

Marshall and other economists enunciated and developed the Law of Diminishing Marginal Utility on the basis of certain assumptions. These assumptions are : No time gap Homogeneous Units Constant income Standard Units Normal persons Constancy in price Changes in other people’s stock Divisible goods Other possessions Fashions Ordinary goods Tastes and preferences Marginal utility of Money The Law of Diminishing Marginal Utility is based on fact that human wants are unlimited. Even though this law is considered a universal one, it has the following exceptions. Exceptions Of The Law Of …

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Assumptions And Limitations Of Law Of Diminishing Marginal Utility

Individuals can’t satisfy all their wants at a time. But they can satisfy a particular want completely. The additional utility from the successive units of the commodity decreases and remains zero at the level of satiety. Hence marginal utility curve slopes downwards. There are some Assumptions And Limitations Of Law Of Diminishing Marginal Utility which are described below. Assumptions and Limitations of the law of Diminishing Marginal Utility : Marshall and other economists enunciated and developed the Law of Diminishing Marginal Utility on the basis of certain assumptions. These assumptions …

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Causes Of Downward Slope Of Diminishing Marginal Utility Curve

law of Diminishing Marginal Utility curve

The Law of Diminishing Marginal Utility is the basic law of consumption which explains the common experience of the consumers. It is based on one of the characteristics of human wants which states that though human wants are unlimited, each want is satiable. We can satisfy any one want at a particular point of time. Diminishing Marginal utility curve slopes downwards based on the satisfaction of the consumers. Causes Of Downward Slope Of Diminishing Marginal Utility Curve : Diminishing Marginal utility curve slopes downwards from left to right due to …

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Law of Diminishing Marginal Utility In Economics

law of Diminishing Marginal Utility curve

The Law of Diminishing Marginal Utility is the basic law of consumption. It explains the common experience of the consumers. It is based on one of the characteristics of human wants which states that though human wants are unlimited, each want is satiable. We can satisfy any want at a particular point of time. Let us suppose that an individual is hungry. Let us further suppose that he was provided with apples. As he goes on consuming one apple after another, he gets complete satisfaction after the consumption of some …

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Consumption: Meaning |Types | Characteristics I Importance

Meaning of Consumption: The term ‘Consumption’ means utilization of goods and services for satisfying the human wants. It also means using up of utilities. For instance when a person eats an apple, he is said to consume it. Similarly when a patient uses the services of doctor, that means he availed the services of the doctor. It may be remembered that consumption implies the use of utilities of a good and service only. But consumption does not denote the destruction of goods and services. It means destruction of utilities of …

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Importance And Classification Of Human Wants In Economics

Prof. Herman classified human wants into twelve types. They are : 1) Absolute and relative wants, 2) Urgent wants and wants that can be postponed, 3) Positive wants and Negative wants, 4) Direct wants and indirect wants. 5) General wants and particular wants, 6) Recurring wants and permanent wants, 7) Temporary wants and fixed wants, 8) Ordinary wants and extra-ordinary wants, 9) Present wants and future wants, 10) Individual wants and collective wants, 11) Private wants and 12) public wants. Classification Of Human Wants In Economics Herman’s classification of wants …

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12 Characteristics Of Human Wants In Economics

Man has Several wants. He has to work and produce goods and services to satisfy his wants. In fact no single person is free from wants. Wants are the starting point of all economic activities. Individuals can’t live and lead happy life when their wants are not satisfied. All persons do not have the same wants. Wants differ from individual to individual. They multiply with civilization. They are endless and ever growing in nature. That is why economists like Lionel Robbins described Economics as the subject dealing with the affairs …

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9 Criteria Of A Good Demand Forecasting Method

A prediction or estimation of future demand for the product is known as demand forecasting. Generally every business firm predicts a number of related forecasts. Since the future is uncertain, these forecasts may not be hundred percent correct. But every firm tries to obtain the forecasts as precisely as possible.A demand forecast is said to be good or efficient when the expected market demand is very near or equal to the actual market demand. This may be estimated closely if proper method of demand forecasting is chosen. However, the following …

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Methods Of Demand Forecasting For A New Product

There are many approaches we can adopt in order to exercise an accurate demand forecasting for a new product. Generally, firms apply the following approaches to forecast their products. Substitute Approach -The demand may be estimated based on the demand of its substitute existing in the market. Evolutionary Approach – Assessing the demand for a new product,  the growth and evaluation of the existing product will be taken into account Buyers or consumers view – The firm takes the review from its customers about the products. Vicarious approach (or Experts’ …

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Concept Of Consumer Sovereignty And Its Limitations

The concept of consumer sovereignty refers to the vital role which consumers play in giving shape to the Productive efforts. The producers shall asses (a) the requirements of consumers, (b) the price payable by the consumers or purchasing power and, (c) the quantities demanded by the consumers before starting production. No businessman can be successful without taking a careful note of the consumer needs, likes and dislikes etc. The term consumer sovereignty has occupied a special place in capitalism. Under capitalism, consumer acts like a king. What is to be …

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