The Law of Equi-marginal Utility suffers from several limitations, which come in the way of its implementation by the consumer. Briefly speaking these are as follows;

1. We have assumed that the goods on which the consumer spends his money are perfectly visible. That is to say, these goods can be bought even in extremely small quantities. A strict use of this assumption is made when we draw smooth and continuous curves representing the ratios of marginal utilities of goods to their prices. In most cases, however, this assumption does not hold. The consumer is faced with lumpy goods. They are not divisible into very small quantities. He has to buy an entire quantity of a good or not at all. This is more so in the case of durable consumption goods. For example, he cannot buy half of a shirt, one-tenth of a bicycle, and the like. Consequently, he fails to apply the law of equi-marginal utility in practice.

2. The law also suffers from the unrealistic nature of its other assumptions. One such assumption is that the consumer has complete knowledge of the prices and availability of all consumer goods. However, this is generally hotel tiffin several cases, the consumer does not possess sufficient information regarding the prices of goods he is interested in. In some cases, he may have incorrect information regarding the price and/or availability of a good.

3. The law assumes independence of utility schedules of goods. It means that utility derived from one good is not affected by the quantity purchased of other goods. In reality, however, many goods are related to each other by being substitutes or complements to each other, to such cases, the ma original utility derived from a given good depends not only upon its own quantity, but also upon the quantity of the related good.


4. The law makes a questionable assumption that the consumer is able to accurately determine the marginal utility schedules of all the goods.