State the law of equi-marginal utility. - Vidyadip

Question

State the law of equi-marginal utility.

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Answer

Law of equi-marginal utility states that a consumer gets maximum satisfaction when the ratio of the marginal utilities of two goods and their prices are equal, i.e.,$\frac{\text{MU}_\text{X}}{\text{P}_\text{X}}=\frac{\text{MU}_\text{Y}}{\text{P}_\text{Y}}.$

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