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Case Title:

A Small Peek into Big B’s Car Collections: Does Law of Diminishing Marginal Utility Hold Good?

Publication Month and Year :  June 2009

Authors:  Nitu Gupta & Akshaya Kumar Jena

Industry: Automobile

Region: Not Applicable

Case Code: ME0010

Teaching Note:  Available

Structured Assignment:  Available


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Abstract:
The case probes a fundamental law in economics The Law of Diminishing Marginal Utility by analysing Amitabh Bachchan’s car collection. Indian cine superstar fondly called Big B, has one of the best collections of cars in India comprising at least 11 cars. A Rolls Royce Phantom, a Bentley Continental GT, a Mercedes SL500, a Porsche Cayman S, a Range Rover, a Lexus LX470, a Mercedes E 240, a BMW X5, a BMW 7 Series, a Mercedes S320 and a Ford Mondeo bedeck his parking porch. ‘Though wants are unlimited, a particular want is satiable’ is the banner line of the law of diminishing marginal utility. Whether this law has failed with Big B shedding no passion in adding to his stock of cars or there is a failure in proper interpretation of the law is an exciting teaser for the reader. While the universality of the law is being debated, the case makes a swift side swing to discuss and deliberate on business implications of the law.

Pedagogical Objectives:

  • To understand the relationship between marginal utility and total utility
  • To analyse the law of diminishing marginal utility and its business implications.

Keywords : Concept of Utility, Marginal Utility, Total Utility, Law of Diminishing Marginal Utility, Relationship between Marginal Utility and Total Utility, Consumer Behavior, Managerial Economics, Microeconomics, Economics for Business, Business Economics, Economics for Managers, Paul Samuelson

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