Limitations of the law of DMU - Theory of Consumer Behaviour, CBSE Class 12 Economics Video Lecture

limitations of the law of marginal
utility now as all laws and economics
have some limitations this law also has
limitations
first homogeneous goods now for law of
diminishing marginal utility to operate
it is important that the goods which are
considered that the goods which are
consumed are homogeneous in nature now
what do you mean by homogeneous goods
homogeneous goods means identical goods
or same goods for example if you are
consuming chocolates you should go on
consuming the same chocolate if you are
consuming the ice cream you should go on
consuming the same ice cream in this
case when we apply the law of
diminishing marginal utility it is
imperative that the same product is
consumed that is if you consume
chocolates you need to consume
chocolates and not only that you need to
consume the same brand same flavor and
the other attributes also being the same
but if you consume other goods that is
when the goods are not homogeneous the
law won't be applicable because when the
goods are not homogeneous you tend to
derive different level of satisfaction
so when you have a chocolate and again
when you have ice cream these two won't
be comparable so for the law of
diminishing marginal utility to operate
it is important that the goods are
homogeneous second standard units of
consumption now in this point standard
means reasonable the units of
consumption should be reasonable let's
consider a person
who is very thirsty and if you feed him
only a spoon of water that will not be a
reasonable unit of consumption probably
when he gets the second spoon of water
he might get a higher amount of
satisfaction from it so when we are
considering the law of diminishing
marginal utility we have to consider at
least reasonable units or the standard
units of consumption in this case the
standard unit of consumption would be a
glass of water
continuous consumption now your
consumption has to be continuous it
cannot be a case it cannot be the case
where you are consuming one unit today
the other unit tomorrow the third unit
day after and so on and so forth the
consumption has to be continuous because
if you have a gap between the
consumption the satisfaction level may
change the satisfaction level may
increase or decrease depending upon the
need for the consumption of that
commodity or the intensity of the want
to consume that commodity so for the law
to operate it is important that the
consumption is continuous and there is
no gap between the consumption of two
units the law fails in case of
prestigious good wouldn't you like to
have more good wouldn't you like to have
more diamonds or wouldn't you like to
have more money so more of these things
you get more is the happiness more is
the satisfaction level more is the
utility that you derive so for the law
to operate you have to cut out the
prestigious or the superior goods the
law does not operate in
experts the law operates only where
normal goods are considered the law does
not operate in case the related goods do
not remain constant or there is a change
in the related inputs
now we've already learned that related
Goods are of two types one complementary
Goods the other substitutes now the
absence or presence of substitutes or
complementary Goods might affect the
consumption pattern
it might also affect the utility derived
from the commodities being consumed
let's take the example of tea now assume
that the first cup of tea that you are
having is without sugar and the second
cup of tea that you are having is with
sugar now what will happen is the
utility or the satisfaction level
derived from the second cup of tea will
obviously be more than the first cup of
tea so in such a case the law of
diminishing marginal utility will not
apply