Question

After reaching a saturation point, consumption of additional units of the commodity cause ______.

• A. Total Utility to fall and Marginal Utility to increase.
• B. Total utility & Marginal Utility both to increase.
• C. Total Utility to fall and Marginal Utility to become negative.
• D. Total Utility to become negative and Marginal Utility to fall.

Answer 1

The correct option is C Total Utility to fall and Marginal Utility to become negative.

Positive marginal utility occurs when the consumption of an additional item increases the total utility, while negative marginal utility occurs when the consumption of an additional item decreases the total utility.