Total utility starts decreasing when ______.a)Marginal utility is posi...
Explanation:
Total utility denotes the total satisfaction that a consumer derives from the consumption of a particular good or service. It is the sum of all marginal utilities derived from each unit of the good consumed.
Marginal utility, on the other hand, refers to the additional satisfaction derived from consuming one additional unit of the good.
Now, let's understand the given options:
a) Marginal utility is positive: When the marginal utility is positive, it means that the additional unit of the good consumed is providing additional satisfaction to the consumer. In this case, the total utility will keep increasing.
b) Marginal utility becomes negative: When the marginal utility becomes negative, it means that the additional unit of the good consumed is actually reducing the total satisfaction derived from the consumption of the good. In this case, the total utility will start decreasing.
c) Marginal utility becomes zero: When the marginal utility becomes zero, it means that the additional unit of the good consumed is not providing any additional satisfaction to the consumer. However, it does not necessarily mean that the total utility will start decreasing. It can remain constant or start decreasing, depending on the previous levels of marginal utility.
d) None of the above: As we have seen above, option B is the correct answer as it states that the total utility starts decreasing when the marginal utility becomes negative.
In conclusion, the total utility will start decreasing when the marginal utility becomes negative as the additional unit consumed starts reducing the total satisfaction derived from the consumption of the good.
Total utility starts decreasing when ______.a)Marginal utility is posi...
Bcz when mu increasing tu also increasing ,as mu falls down/decreasing tu increases but at the diminishing rate ,when mu is 0 tu is at their higher point but as the mu goes down i.e. negative tu starts declining.
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