What happens to total utility when marginal utility is falling?
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Answer:
As can be seen in these diagrams, total utility increases with increasing quantity of a single item until marginal utility = 0; thereafter, total utility declines when marginal utility becomes negative.
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The Law of Diminishing Marginal Utility
The first good consumed provides the highest utility, the second good has a lower marginal utility, and so on. Therefore, total utility grows less rapidly with each additional unit consumed of the same good or service.
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