Hermann heinrich gossen wiki
Law of equi-marginal utility
Gossen first law!
Gossen's second law
Optimize by equalizing marginal utilities
Gossen's Second “Law”, named for Hermann Heinrich Gossen (1810–1858), is the assertion that an economic agent will allocate his or her expenditures such that the ratio of the marginal utility of each good or service to its price (the marginal expenditure necessary for its acquisition) is equal to that for every other good or service.
Formally,
where
Informal derivation
Imagine that an agent has spent money on various sorts of goods or services. If the last unit of currency spent on goods or services of one sort bought a quantity with less marginal utility than that which would have been associated with the quantity of another sort that could have been bought with the money, then the agent would have been better off instead buying more of that other good or service.
Assuming that goods and services are continuously divisible, the only way that it is possible that the marginal expenditure on one good or
