Exceptions or Limitations:
The limitations or exceptions of the law of diminishing marginal utility are as follows:- The law does not hold well in the rare collections. For example, collection of ancient coins, stamps etc.
- The law is not fully applicable to money. The marginal utility of money declines with richness but never falls to zero.
- It does not apply to the knowledge, art and innovations.
- The law is not applicable for precious goods.
- Historical things are also included in exceptions to the law.
- Law does not operate if consumer behaves in irrational manner. For example, drunkard is said to enjoy each successive peg more than the previous one.
- Man is fond of beauty and decoration. He gets more satisfaction by getting the above merits of the commodities.
- If a dress comes in fashion, its utility goes up. On the other hand its utility goes down if it goes out of fashion.
- The utility increases due to demonstration. It is a natural element.
