Question

If an individual continued to consume more and more units of a commodity, a point would be reached where his total utility would stop increasing. This is called the __________.

• A. Equilibrium point
• B. Optimum point
• C. Saturation point
• D. None of these

Answer 1

Answer: (C)

Saturation point

When an individual starts consuming something, he gains utility from it. But when he consumes more and more units of the commodity, a point is reached when he does not gain any satisfaction from consuming any more unit of it. That point is called the saturation point. The individual will not be able to consume more units after this, and even if he does he will incur negative utility.