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Question
When MU is ______ TU decreases.
When MU is ______ TU decreases.
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Solution
The correct option is A negative
Marginal Utility is nothing but the extra utility/satisfaction derived from the use of successive units of commodity by a consumer. MU is the rate of change in TU.At the initial level of consumption MU increases and TU also increases but later on there is a saturation point of consumption where MU is ZERO and TU is at its top and after that MU gets negative and TU gets decrease.
Marginal Utility is nothing but the extra utility/satisfaction derived from the use of successive units of commodity by a consumer. MU is the rate of change in TU.
At the initial level of consumption MU increases and TU also increases but later on there is a saturation point of consumption where MU is ZERO and TU is at its top and after that MU gets negative and TU gets decrease.
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