What are the Limitations of Law of Equi Marginal Utility? (7 Limitations)
In actual life, we come across many situations, where the law of equi-marginal utility is not applicable. Some of the important limitations are:(i) It is assumed that the consumer spends very small amount of money on different commodities. However, this is not possible as commodities, especially costly ones, are indivisible. Radios, TV, telephone, etc., are such commodities, which cannot be bought in parts. Their purchases are bulky and do not allow small variation. In such cases, it becomes difficult to equate marginal utilities.(ii) Most of the consumers are ignorant. They do not know about the various alternatives which are most useful. Consumers are not prudent enough to assess and compare variations in marginal utilities of different commodities. image source: i.ytimg.com ADVERTISEMENTS: (iii) The law assumes that utility can be measured.…