Why a consumer cannot purchase every combination of the two goods that he wishes to purchase? Give reasons.
Dear Student
According to the law of marginal utility, an additional utility from the consumption of additional units diminishes. and when a consumer has to choose between two goods, he will spend an extra rupee on that good which would give him higher utility. hence to maximize his satisfaction from the consumption of those two goods he will choose only that combination which provides maximum utility. but given the income of the consumer, his purchasing power is limited and he will choose that combination which he can buy with his disposable income and which gives him the highest possible satisfaction
Regards,
According to the law of marginal utility, an additional utility from the consumption of additional units diminishes. and when a consumer has to choose between two goods, he will spend an extra rupee on that good which would give him higher utility. hence to maximize his satisfaction from the consumption of those two goods he will choose only that combination which provides maximum utility. but given the income of the consumer, his purchasing power is limited and he will choose that combination which he can buy with his disposable income and which gives him the highest possible satisfaction
Regards,