relation between total utility and marginal utility. write in 5 points.
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Answer:
Relation: total utility is the summation of marginal utility.
Total utility is the sum total of utility derived from the consumption of all the units of a commodity. To illustrate, if 2 units of a commodity are consumed and 1st unit yields satisfaction of 10 utils, while 2nd unit yields satisfaction of 9 utils, then total utility is 19 utils.
Marginal utility refers to additional utility obtained from the consumption of an additional unit of a commodity. To illustrate, if 10th unit yields satisfaction of 100 utils, while 11th unit yields satisfaction of 105 utils, then marginal utility derived from the 11 th unit is 5 utils.
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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 .