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What is Law of Equi Marginal Utility Explained about?
The law of equi-marginal utility states that a consumer will allocate their income across goods in a way that equalizes the marginal utility per rupee spent. It assumes consumers rationally maximize satisfaction subject to a budget. The law is illustrated with an example of a consumer spending Rs. 26 across goods X and Y, equalizing marginal utility per rupee at the point of equilibrium consumption.
- Author
- ambersaleem
- Language
- EN