Generally, the more of a particular commodity human being possesses the less the intensity for more. Hence man\u2019s subsequent unit, desire diminishes.<\/p>\n
The law of diminishing marginal utility was first formulated in 1854 by Hermann H. Gossen, though the name was given by Alfred Marshal and Jevons calls it Gossen’s first law. Gossen defines it as \u201cthe magnitude of one and the same satisfaction, when we continue to enjoy it without interruption, continually decreases until satiation is reached\u201d<\/strong><\/p>\n The law of diminishing marginal utility can, therefore, be stated that as consumption of any single product increases, the TU therefrom will increase (up to a point) \u2013 but marginal utility gradually decreases. In other words, as the quantity consumed of a product increases per unit of time, the utility derived from each successive unit decreases, consumption of other commodities remaining constant.<\/p>\n Jhingan (2005) identifies the following assumptions:<\/p>\n iii. There should be continuity in the consumption of the commodity.<\/p>\nGesetz des abnehmenden Grenznutzens<\/h2>\n
Assumptions of the law of diminishing marginal utility:<\/h3>\n
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