6. Larger the stock of the commodity, __________ is the TU. *
1 indifferent
2 lesser
3 equal
4 larger
Answers
Answer:
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Larger the stock of the commodity, larger is the TU.
The answer is option (4)
The sum of all the marginal utilities derived from the consumption of a specific quantity of a commodity or stock is called Total utility.
Marginal utility implies the additional utility derived from the consumption of an additional unit of a commodity or stock. The marginal utility is the difference between two successive total utilities.
Total utility increases with an increase in stock till a certain stage of consumption.
- When the stock increases, the marginal utility keeps on diminishing, and the total utility increases till the marginal utility are positive. The increase rate decreases.
- When marginal utility is zero, total utility is maximum.
- And when marginal utility becomes negative the total utility starts decreasing.
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