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Total utility is maximum when:
- a)Marginal utility is maximum
- b)Marginal utility is Zero
- c)Average utility is maximum
- d)Average utility is Zero
Correct answer is option 'B'. Can you explain this answer?
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Total utility is maximum when:a)Marginal utility is maximumb)Marginal ...
Total utility is maximum when:
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- Marginal utility is Zero
- Total utility refers to the total satisfaction or benefit derived from consuming a good or service.
- Marginal utility is the additional satisfaction or benefit gained from consuming one more unit of a good or service.
- As a consumer consumes more units of a good, the marginal utility of that good eventually decreases.
- This concept is known as the Law of Diminishing Marginal Utility.
- When the marginal utility of a good becomes zero, it means that consuming one more unit of the good will not provide any additional satisfaction or benefit to the consumer.
- At this point, the total utility derived from the good is at its maximum, as consuming more units will not increase the consumer's satisfaction.
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Total utility is maximum when:a)Marginal utility is maximumb)Marginal ...
Explanation:
Total utility: It refers to the overall or total satisfaction obtained from the consumption of all units of a commodity or service.
Marginal utility: It refers to the additional satisfaction or utility derived from consuming one additional unit of a commodity or service.
Average utility: It refers to the total utility divided by the total number of units consumed.
Maximum total utility: It is the point at which the total utility derived from the consumption of a commodity or service is at its highest level.
To answer the given question, we need to understand the relationship between total utility and marginal utility.
- When the marginal utility of a commodity or service is positive, the total utility increases.
- When the marginal utility of a commodity or service is zero, the total utility is at its maximum.
- When the marginal utility of a commodity or service is negative, the total utility starts to decrease.
Therefore, the correct answer is option 'B' as the total utility is maximum when the marginal utility is zero. This is because at this point, any additional unit of the commodity or service will not increase the total utility, but will only maintain it at the maximum level. Once the marginal utility becomes negative, the total utility starts to decrease, hence the maximum total utility is at the point where the marginal utility is zero.
Total utility: It refers to the overall or total satisfaction obtained from the consumption of all units of a commodity or service.
Marginal utility: It refers to the additional satisfaction or utility derived from consuming one additional unit of a commodity or service.
Average utility: It refers to the total utility divided by the total number of units consumed.
Maximum total utility: It is the point at which the total utility derived from the consumption of a commodity or service is at its highest level.
To answer the given question, we need to understand the relationship between total utility and marginal utility.
- When the marginal utility of a commodity or service is positive, the total utility increases.
- When the marginal utility of a commodity or service is zero, the total utility is at its maximum.
- When the marginal utility of a commodity or service is negative, the total utility starts to decrease.
Therefore, the correct answer is option 'B' as the total utility is maximum when the marginal utility is zero. This is because at this point, any additional unit of the commodity or service will not increase the total utility, but will only maintain it at the maximum level. Once the marginal utility becomes negative, the total utility starts to decrease, hence the maximum total utility is at the point where the marginal utility is zero.
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Total utility is maximum when:a)Marginal utility is maximumb)Marginal ...
Answer B, because of relationship b/w TU & MU
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Total utility is maximum when:a)Marginal utility is maximumb)Marginal utility is Zeroc)Average utility is maximumd)Average utility is ZeroCorrect answer is option 'B'. Can you explain this answer?
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