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Question
Marginal utility is equal to average utility at that time when average utility is _____.
Marginal utility is equal to average utility at that time when average utility is _____.
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Solution
The correct option is B maximum
Average utility is that utility in which the total unit of consumption
of goods is divided by number of total units. The quotient is known as
average utility.
Marginal utility is the utility derived from the last or marginal unit of
consumption. It refers to the additional utility derived from an extra unit of
the given commodity purchased, acquired or consumed by the consumer.
The point at which the average utility is maximum, the marginal utility curve intersects the average utility curve at this point, thus, both are equal.
Average utility is that utility in which the total unit of consumption of goods is divided by number of total units. The quotient is known as average utility.
Marginal utility is the utility derived from the last or marginal unit of consumption. It refers to the additional utility derived from an extra unit of the given commodity purchased, acquired or consumed by the consumer.
The point at which the average utility is maximum, the marginal utility curve intersects the average utility curve at this point, thus, both are equal.
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