Critical evaluation of the Law of DMU is as follows:

(1) Unrealistic Assumptions : The law of DMU is based upon some unrealistic assumptions like homogeneity, continuity, rationality, constancy, etc.

In reality, it is very difficult to fulfil all these ssumptions at a time.

(2) Cardinal Measurement – not possible : The law assumes that, utility is cardinally measurable. It is necessary for the law to express schedule indicating MU and TU. It helps to add, subtract and compare utilities, In the real sense, utility is a psychological concept so it cannot be measured cardinally i.e. in numbers.

(3) Not applicable to Indivisible Goods : The law assumes divisibility. So it is not applicable to indivisible or bulky goods like car, T.V. set, house, etc. which are not divisible. It is not possible to compare MU from commodity which are normally purchased, once in a life time.

(4) Constant MU of Money: The law assumes that MU of each unit of money is constant. But, in reality, MU of money declines as its stock increases.

Critics also argue that MU of money differs from person to person. It is affected by changes in price level, stock of money, rate of interest, etc.

(5) Restricted to satisfaction of Single Want : The law of DMU has limited applicability. It analyses the satisfaction derived from single want.

In reality, human wants are multiple in nature i.e. a person has to satisfy many wants at a time.

Though, law of DMU is criticized, it is important and popular in economics, because it explains economics behavior of a rational consumer.