Question

Explain the Relationship Between TU and MU

Answer 1

The relationship between TU (total utility) and MU (marginal utility) can be discussed as follows:

1. As long as MU (marginal utility) is positive, the TU (total utility) increases with an increase in the consumption of a commodity. As MU from each successive unit diminishes, at that time TU increases but at a diminishing rate.
2. When TU is maximum, the MU reaches zero. TU stops growing in this phase, this point is known as the point of safety.
3. When consumption increases beyond the point of satisfaction, then the MU becomes negative and TU starts falling.

Also read:

• Difference Between Total Utility and Marginal Utility
• Consumer Equilibrium Utility Analysis
• Difference Between Cardinal and Ordinal Utility Study Material
• Utility

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