Question

Explain the relation between Total utility and marginal utility. 5 marks​

Answer 1

Explanation:

Marginal utility is the addition made to total utility by having an additional unit of the commodity. ... So long as total utility is increasing, marginal utility is decreasing up to the 4th unit. When total utility is maximum at the 5th unit, marginal utility is zero. It is the point of satiety for the consumer.

Answer 2

The relationship between total and marginal utility :-

• TU and MU both starts from same point .

• As TU increases , MU falls by consuming every additional unit of good or service .

• When TU at its maximum level , MU is Zero .

• When TU starting decline , at the same time MU tends to negative .