Gossen's laws

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Gossen's laws, named for Hermann Heinrich Gossen (1810 – 1858), are three laws of economics:

\frac{\partial U/\partial x_i}{p_i}=\frac{\partial U/\partial x_j}{p_j}\,\forall\left(i,j\right)
where
  • U is utility
  • x_i is quantity of the i-th good or service
  • p_i is the price of the i-th good or service
  • Gossen's Third Law is that scarcity is a precondition for economic value.

See also[edit]

References[edit]

  • Gossen, Hermann Heinrich; Die Entwicklung der Gesetze des menschlichen Verkehrs und der daraus fließenden Regeln für menschliches Handeln (1854). Translated into English as The Laws of Human Relations and the Rules of Human Action Derived Therefrom (1983) MIT Press, ISBN 0-262-07090-1.