Can marginal utility ever be negative ? Illustrate your answer using a...
Yes. if we use standard unit of any commodity continuously one situation is come when TU curve start declining and MU is inegative
Can marginal utility ever be negative ? Illustrate your answer using a...
Yes, marginal utility can be negative in certain situations.
Factors affecting marginal utility
There are several factors that can affect the marginal utility of a good or service, including:
- Quantity: As the quantity of a good or service consumed increases, the marginal utility typically decreases.
- Satiation: Eventually, a consumer may become satiated with a good or service, causing the marginal utility to become negative.
- Substitution: If a consumer has access to a substitute for a good or service, the marginal utility may decrease or become negative.
- Complementarity: Conversely, if a good or service is complementary to another good or service, the marginal utility may increase.
Table and diagram
To illustrate the concept of negative marginal utility, consider the following table and diagram.
Quantity of Pizza Consumed | Total Utility | Marginal Utility
--- | --- | ---
0 | 0 | -
1 | 10 | 10
2 | 18 | 8
3 | 24 | 6
4 | 28 | 4
5 | 30 | 2
6 | 30 | 0
7 | 28 | -2
In this example, a consumer is eating pizza. As the consumer eats more pizza, the total utility increases, but the marginal utility decreases. By the time the consumer reaches the seventh slice of pizza, the marginal utility has become negative, meaning that the consumer is actually less satisfied with each additional slice of pizza.
The diagram below shows this relationship graphically:
![Marginal Utility Diagram](https://cdn1.edurev.in/serve/5e/1650x0w/5e9f20c1-4ed7-4a9f-88e9-8dce5c3f6a5c.png)
As the quantity of pizza consumed increases, the marginal utility curve slopes downward. At some point, the marginal utility becomes negative, indicating that each additional unit of pizza is actually decreasing the consumer's satisfaction.
Conclusion
In conclusion, marginal utility can indeed be negative. This occurs when a consumer reaches a point of satiation or has access to a substitute for a good or service. The concept of negative marginal utility is important for understanding consumer behavior and demand.
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