Answer to Question #266015 in Management for Riya

Question

Calculate Marginal Utility and Average Utility from the information given in the below

table:

Quantity Consumed Total Utility

1 20

2 35

3 47

4 55

5 60

Answer 1

Marginal utility and average utility

Marginal Utility= (change in total utility)/(change in quantity consumed)

Average Utility= total utility divided by total quantity consumed.

Quantity Consumed Total Utility Marginal utility Average utility

1 20 =$\frac{20}{1}$ =20 $=\frac{20}{1}=20$

2 35 =$\frac{35-20}{2-1}$ =15 $=\frac{35}{2}=17.5$

3 47 =$\frac{47-35}{3-2}$ =12 $=\frac{47}{3}=15.67$

4 55 =$\frac{55-47}{4-1}$ =8 $=\frac{55}{4}=13.75$

5 60 =$\frac{60-55}{5-4}$ =5 $=\frac{60}{5}=12$