Saturday, September 1, 2018

DIMINISHING MARGINAL UTILITY IN COMPANIES

Law of Diminishing marginal utility
As consumption increases the marginal utility derived from every additional unit keeps on declining. 
Example :
1.PIZZA WORLD, Mumbai
Pizza world offers unlimited pizza @500 for  two people. Here they  attract customer  by providing pizza at nominal rate but uses law of diminishing marginal utility i.e. Consumers gets less utility after every additional pizza they eat. 
2.TAJ HOTELS
When we book a room for a day for two, the hotel provides breakfast in a buffet system to you. One can have all that they want free of cost, here they use law of diminishing marginal utility as a consumer cannot eat the whole even when they provide a large quantity.

No comments:

Post a Comment

IMPACT OF SOCIETY /SOCIAL GROUPS ON PURCHASE INTENTIONS OF HOME BUYING- Consumers are the most important factor that will make any bus...