Question

After reaching the saturation point, consumption of additional units of the commodity cause: (a) Total utility to fall and marginal utility to increase. (b) Total utility and marginal utility both to increase. (c) Total utility to fall and marginal utility to become negative. (d) Total utility to become negative and marginal utility to fall.

Answer 1

total utility to become negative and marginal utility to fall

Answer 2

After reaching the ‘saturation point’, the consumption of ‘additional units’ of the ‘commodity’ causes ‘Total utility to fall and marginal utility to become negative.’

Option: (c)

Explanation:

• According to the ‘law of diminishing marginal utility’ when the consumption a certain good increases then there is a decrease in the marginal utility that is derived from each ‘successive unit’ of that good while ‘keeping the consumption’ of other ‘goods constant’.  

• After reaching the ‘saturation point’ the consumption of an additional unit will lead to zero ‘utility and marginal utility’ is negative.