Kajal was trying to prove the law of diminishing marginal utility, so she started to consumer a pizza slice. She ate her 1st slice at 10 am in the morning and got 50 utils of satisfaction and then ate another at 5 pm in the evening which gave him 60 utils of satisfaction. But what she noticed was that the marginal utility of pizza did not decrease. According to you, which assumption of "Law of diminishing marginal utilty" was refuted?

Continuous consumption

The correct answer is option 3: Continuous consumption

The law of diminishing marginal utility states that all else equal, as consumption increases, the marginal utility derived from each additional unit declines. Marginal utility is the incremental increase in utility that results from the consumption of one additional unit.

One of the assumption which is being violated in the above situation is "Continuous consumption". As, Kajal is eating the 1st slice in the morning and having the 2nd slice in the evening, the assumption is being violated. Continuous consumption states that there should be no time gap between the consumption of successive units of the commodity.

The law of diminishing marginal utility makes several assumptions:

• The goods being consumed are identical.
• The units are consumed quickly with few breaks in between.
• Units are not too big or too small.
• The consumer's taste is constant.
• There is no change in the price of the goods or of their substitutes.
• The unit can be measured (Cardinal Measurement).
• The consumer is making rational decisions about consumption.