Law of Equimarginal Utility

Introduction

The law of equimarginal utility is otherwise known as the law of maximum satisfaction or the law of consumer’s equilibrium. The law of maximum satisfaction or the law of consumer’s equilibrium. The law is an extension of the law of diminishing marginal utility which is a applicable to a single want with a commodity in one use, If the consumer consumes one commodity, then he will go on purchasing the said commodity till the marginal utility of the commodity is equal to the price paid. As a result he gets maximum satisfaction. But in reality. the consumer needs a variety of goods. But money income to purchase those goods are limited. Therefore he has allocated his limited income among his chosen goods in such a manner so that he will get maximum satisfaction.