1. Cardinal Measurement: It is assumed that utility
can be measured in cardinal numbers or numerical terms. Such assumption helps
to construct (make) the utility schedule to explain the Law of Diminishing U.
2. Continuity in Consumption: All units of the commodity
are to be consumed in quick succession. There should not be a gab or interval
between consumption of two different.
3. Ceteris Paribus: The Law of DMU assumes that
other things are constant. For instance, taste, income, preference, attitudes,
habits of the consumer should remain the same. If there is a change in attitude
then marginal utility of the commodity may not diminish.
4. Homogeneity: All units of the commodity
must be identical in all respects such as quality, shape, size, colour, taste,
and so on. If there are differences in the units consumed, the marginal utility
may not diminishes.
5. Rationality:It is assumed that consumer behaviour is
rational. (Not be mad) the consumer is a normal person who wants to obtain
maximum satisfaction. The consumer should not be abnormal such as drug addict,
drunkard, miser (kanjus), and so on.
6. Reasonable Units: The units of a
commodity consumed should be of reasonable size. The units should neither be
too big nor too small. The units must be of standard size.
