The Marginal Utility Theory of consumer behavior is based on several key assumptions. Here are a few of them:

1. Rationality: This theory assumes that consumers are rational in their behavior. They aim to maximize their satisfaction or utility from the consumption of goods and services.

2. Diminishing Marginal Utility: This theory assumes that the additional satisfaction or utility a consumer gains from consuming an additional unit of a good or service decreases as the total consumption of that good or service increases.

3. Utility is Quantifiable: The theory assumes that utility can be measured and expressed in cardinal numbers, like 1, 2, 3, etc. This is a controversial assumption because utility is a subjective concept and may vary from person to person.

4. Independence of Choices: The theory assumes that the choice of one commodity does not affect the choice of another commodity. In other words, the utility derived from one good is independent of the utility derived from other goods.

5. Constant Marginal Utility of Money: The theory assumes that the marginal utility of money remains constant regardless of the level of a consumer's income.

6. Non-Satiety: The theory assumes that a consumer never reaches a point of complete satisfaction. There is always a desire for more.

These assumptions help to simplify the analysis of consumer behavior, but they may not always hold true in real-world situations.

Question

The Marginal Utility Theory of consumer behavior is based on several key assumptions. Here are a few of them:

1. Rationality: This theory assumes that consumers are rational in their behavior. They aim to maximize their satisfaction or utility from the consumption of goods and services.

2. Diminishing Marginal Utility: This theory assumes that the additional satisfaction or utility a consumer gains from consuming an additional unit of a good or service decreases as the total consumption of that good or service increases.

3. Utility is Quantifiable: The theory assumes that utility can be measured and expressed in cardinal numbers, like 1, 2, 3, etc. This is a controversial assumption because utility is a subjective concept and may vary from person to person.

4. Independence of Choices: The theory assumes that the choice of one commodity does not affect the choice of another commodity. In other words, the utility derived from one good is independent of the utility derived from other goods.

5. Constant Marginal Utility of Money: The theory assumes that the marginal utility of money remains constant regardless of the level of a consumer's income.

6. Non-Satiety: The theory assumes that a consumer never reaches a point of complete satisfaction. There is always a desire for more.

These assumptions help to simplify the analysis of consumer behavior, but they may not always hold true in real-world situations.

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