Which of the following are true- In cardinal approach, a) When TU is rising at an increasing rate, MU also rises . b) When TU is rising at decreasing rate, MU falls. c) MU falls due to Law of Diminishing Marginal Utility. d) When TU is maximum MU is 0.
Options:
a, b, c and d
a, c and d
b, c and d
a, b and c
Correct Answer:
a, b, c and d
Explanation:
The relationship between TU and MU can be explained as follows:
When MU increases, TU increases at an increasing rate.
When MU decreases, TU increases but at a diminishing rate.