Question

What changes will take place in TU, when:
(i) MU curve remains positive;
(ii) MU becomes ‘0’ ;
(iii) MU is negative.​

Answer 1

Answer:

TU increases with an increase in consumption of a commodity as long as MU is positive. In this phase, TU increases but a diminishing rate as MU from each successive unit tends to diminish. 2. When TU reaches its maximum, MU becomes zero.

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Answer 2

Answer:

• What changes will take place in TU, when (i) MU curve remains above the X-axis, (ii) MU curve touches the X-axis, (iii) MU curve lies below the X-axis. (i) TU will increase, but a diminishing rate, (ii) TU will be maximum, (iii) TU starts to fall.