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ASSIGNMENT OF ECONOMICS

TO UNDERSTAND THE CONCEPT UTILITY AND CONSUMER BEHAVIOUR

SUBMITTED BY-MEET SOBBAR

SUBMITTED TO-VANI MAM

The law of diminishing marginal utility means as we consume one additional unit of a commodity our marginal utility diminishes. It means our satisfaction decreases when we consume more and more.

The law of dmu apply on all the three classes but in this case this apply only on upper and middle class but on lower class. To clear my point I would like to explain all the three classes individually.

1.Upper class- It is a class having all the necessary things as well as luxurious things. This class does not feel any

scarcity of money etc. It means they feel already secure and satisfied. The law of dmu does apply on this class but the rate of diminishing marginal utility is very high, it means getting a quicker satisfaction than the other classes. So in case of foreign trip no doubt they feel some excitement in first 5 to 7 times but then they get used to it. So, the satisfaction rate is quite high.

2.Middle class- This is a class of having necessary things but not luxurious things. The law of dmu applies on this class too but the rate of dmu is moderate because having a luxurious thing like a foreign trip is like a starting of a luxurious life, so at starting of a new life people feel very excited and it takes time to get used to it but at last middle class people surely get

used to it so this law is applicable to this class and in the case of foreign trip too.

3.Lower class- The law of dmu does apply to this class but at a very low rate and in the case of foreign trip this law does not apply to this class. This lower class struggle their whole life to get the necessary goods, they does not even know about the luxurious things so it takes very long time to get a satisfaction from luxurious things. But when a low class person go to a foreign trip he will feel the same satisfaction if he goes one another time, because he is not used to any kind of change like this and even not able to go to foreign countries.

CONCLUSION I think the law of diminishing marginal utility does apply on all the three classes but it applies perfectly on middle class but not on upper and lower class because upper class has all the things and lower class almost nothing.