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Answer to Question #86932 in Microeconomics for zwavhudi nemasetoni
Question #86932
6. Paul Mabaso’s average utility from the consumption of 8 chocolates is 25 utils per slab. If the marginal utility of the 9th slab is 20 utils, will his average utility increase, decrease or stay constant if he consumes 9 slabs? Explain. What will happen to his total utility? (4)
Expert's answer
As marginal utility decreases with the increase in consumption, then the average utility will decrease too, but the total utility will increase.
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