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Question
When TU is maximum and remains constant then MU is _______.
When TU is maximum and remains constant then MU is _______.
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Solution
The correct option is A zero
Marginal means over and above the total by additional quantity whereas Total Utility is the total satisfaction derived by the consumption of sum of quantities of a commodity. 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 maximum and remains constant and then after MU starts negative and TU starts declining.
Marginal means over and above the total by additional quantity whereas Total Utility is the total satisfaction derived by the consumption of sum of quantities of a commodity. 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 maximum and remains constant and then after MU starts negative and TU starts declining.
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