Economy, asked by nikitasingh3324, 8 months ago

when MU is zero TU is zero or undefined .....
plzzz answer seriously do not post nonsense answer and do not copy from internet . ​

Answers

Answered by aditisuyog
0

To understand the relation between MU and TU, we first need to know the Law of Diminishing Marginal Utility

According to the Law of DMU, as we consume more and more units of commodity, the additional utility derived from each successive unit keeps on diminishing.

Take an example, of a commodity, say , ice cream. As you keep on eating ice creams, you will get more and more satisfaction(utility) , but at one point your satisfaction level will be maximum. If you keep eating ice cream after this point, your satisfaction(utility) will decrease.

The DMU schedule will help you understand more...

Units          Total Utility                   Marginal Utility          

1                    20                                           20                        

2                   36                                            16

3                   46                                            10    

4                   50                                             4

5                   50                                            0

6                   44                                           -6

Till the 4th unit of ice cream, your TU keeps increasing. At 5th unit, it is constant. After the 5th unit, TU goes down.

From this we can see, that when MU = 0, TU is maximum.

Hope this helps...

xoxo

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