Question

State with reason whether you agree or disagree.
When MU is zero, TU diminishes.

Answer 1

Yes, the statement is correct. For this, we will have to see the relationship between TU and MU.

The relationship between TU and MU:

1.TU increases with an increase in consumption of a commodity as long as MU is positive. In this phase, TU increases but a diminishing rate as MU from each successive unit tends to diminish.

2.When TU reaches its maximum, MU becomes zero. TU stops rising at this stage. This point is known as the point of satiety.

3.When consumption is increased beyond the point of satiety, TU starts falling as MU becomes negative.

Thus we see, when MU is zero, TU starts to dimish.