Criticism of Law of Equi-Marginal Utility

Criticism, Limitations and Exceptions of The Law of Equi-Marginal Utility

Following are the main reasons for the criticism of the Law of Equi-marginal utility by H. H. Gossen. Although, it is a basic law of economics and consumers knowingly or unknowingly are compelled, to follow this law. This law is applicable in every field of economic analysis.

  1. Generally, Consumers are not Calculative by Nature

    Consumers do not spend their income based on calculations, rather they spend their income, according to their habits.

  2. Indivisibility of Goods

    Several commodities, such as – Scooters, T.V., Machines, etc. cannot be divided into small units. Therefore, the comparison of the utility of these units is not possible and these cannot be compared with the marginal units of other commodities.

  3. Consumers are not Rational

    Man is influenced by customs, traditions, habits, and fashion. So, he spends his income unintentionally on commodities that give less utility. Hence, he is not always rational.

  4. Correct Measurement of Utility is not Possible

    Correct measurement of utility is not possible because utility is mental satisfaction.

  5. The utility of Money is not Stable

    Like commodities, the utility of money also keeps on decreasing. Moreover, the prices of commodities keep on changing (increases and decreases) whereas, money is assumed stable in this law.

  6. Lack of Knowledge of the Utility

    The consumer does not have any knowledge, about the utility of commodities.

  7. Durability of Goods

    We keep on receiving utility eventually, from durable goods. So, in short term the comparison of the marginal utility of these goods is impossible.

  8. Maximum Utility does not mean Maximum Satisfaction

    According to critics, the actual utility can be maximized but total satisfaction cannot be maximized, by this law. But in practical life, Utility and Satisfaction are two separate things and these have no direct relation.

  9. Unavailability of a Few Goods

    Sometimes, goods of higher utility are not available in the market and the consumer must consume the goods of lesser utility, in place of the goods of higher utility.

  10. Supplementary Goods

    Some goods are supplementary to each other, and these are used simultaneously in certain proportions. Such as Cars and Petrol. This law is not applicable, in respect of these goods.


Despite the above practical difficulties in the implementation of the Law of Equi-marginal Utility, this law cannot be considered mere imagination or unreal. In fact, it is a basic law of economics, and consumers knowingly or unknowingly are compelled, to follow this law. This law is applicable in every field of economic analysis. According to Professor Chapman

We are not compelled to distribute our income, according to the Law of Equi-marginal utility as a stone thrown in air is compelled in a sense to fall back on the earth; but as a matey of fact, we do so in a certain rough fashion, became we are reasonable.

The importance of this law is also discussed later.

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