Question

Marginal utility is zero when total utility is

a. Is deceasing
b. Is increasing
c. Equal to marginal utility
d. At its maximum
e. Equal to zero
Kindly tell the right answer of question and why

Answer 1

d. At its maximum
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.