Economy, asked by wwwrammanoharg5809, 1 year ago

Higher consumption of a commodity means lower and lower marginal utility but total utility can never be negative.do you agree?

Answers

Answered by maryamkincsem
3

Total utility is maximum satisfaction received from consuming a quantity of a good or service, while marginal utility is the satisfaction gained from consuming an additional quantity of a particular good or service.


In the above question you are basically talking about the concept of diminishing marginal utility.


Diminishing marginal utility means that the more consumption of one good is done the less satisfaction it provides. The first unit of consumption yields more utility than the second and third units consumed with a continuing reduction for greater amounts.


For a single commodity total utility is maximized when marginal utility reaches zero. Total utility starts declining when marginal utility becomes negative.



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