Basic Limitation of Utility Analysis
The fundamental problem in utility analysis is that it makes the incorrect assumption that utility can only be stated in cardinal numbers. it implies that utils like 1, 2, and 3 can never accurately represent usefulness. When two things are consumed concurrently, satisfaction can be compared at best. It is challenging to assess in figures. Due to this drawback, utility analysis is shown to have minimal application in describing consumer equilibrium.
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