daniel bernoulli came up with the law of diminishing marginal utility.
daniel bernoulli came up with the law of diminishing marginal utility.
who came up with the law of diminishing marginal utility?
daniel bernoulli
carl menger presented the theory in "grundsätze der volkswirtschaftslehre" (translated as "principles of economics") in 1871. menger's presentation is peculiarly notable on two points. first, he took special pains to explain "why" individuals should be expected to rank possible uses and then to use marginal utility to decide amongst trade-offs. (for this reason, menger and his followers are sometimes called “the psychological school”, though they are more frequently known as “the austrian school” or as “the vienna school”.) second, while his illustrative examples present utility as quantified, his essential assumptions do not. (menger in fact crossed-out the numerical tables in his own copy of the published "grundsätze".) menger also developed the law of diminishing marginal utility. menger's work found a significant and appreciative audience.
marginal utility
the concept in cardinal utility theory that marginal utilities diminish across the ranges relevant to decision-making is called the "law of diminishing marginal utility" (and is also known as gossen's first law). this refers to the increase in utility an individual gains from increasing their consumption of a particular good. "the law of diminishing marginal utility is at the heart of the explanation of numerous economic phenomena, including time preference and the value of goods ... the law says, first, that the marginal utility of each homogenous unit decreases as the supply of units increases (and vice versa); second, that the marginal utility of a larger-sized unit is greater than the marginal utility of a smaller-sized unit (and vice versa). the first law denotes the law of diminishing marginal utility, the second law denotes the law of increasing total utility."
marginal utility