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Answer to Question #64010 in Economics for Faisal
Question #64010
Marginal utility is zero when total utility is
a. Is deceasing
b. Is increasing
c. Equal to marginal utility
Please tell which is right answer and why
a. Is deceasing
b. Is increasing
c. Equal to marginal utility
Please tell which is right answer and why
Expert's answer
b. Is increasing
This corresponds to the law of diminishing marginal utility. It says ‘as more and more units of a good are consumed, marginal utility (level of satisfaction derived from each successive unit) goes on falling because desire for that commodity tend to fall.
This corresponds to the law of diminishing marginal utility. It says ‘as more and more units of a good are consumed, marginal utility (level of satisfaction derived from each successive unit) goes on falling because desire for that commodity tend to fall.
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