This law states that when a person consume more unit of goods a point reach where it marginal utility diminishes and reach to negative. When a person consumes units of good first it’s total utility increases and its marginal utility also diminishing. As more units are consumed the total utility equals and marginal utility becomes zero.

 

When more units consumed then the totally utility diminishes and marginal utility becomes negative. This happens because there is a limit of consuming a good. When limits end then it becomes negative.

 

Assumption: Rational Person: This law can be applied when the person is of sound mind and knows everything. Equal Unit: The goods consumed for applying of law should be of equal and suitable size. Taste: The taste of consumer should not be changed. It should remain same. Divisible Goods: The goods should be divisible in parts.

 

Marginal Utility: The marginal utility should be decreased income. The income of a person should not be changed. Time: There should not be gapped between the uses of units of goods. Limitations: Hobbies: The law is not applied on hobbies because its desires cannot be decrease. Cheaper Goods: This law cannot be applied on cheaper goods. Luxurious items: this law cannot be applied on luxurious items.