Some values are missing from the table of a consumer’s utility from a commodity.
| Units | Total utility | Marginal utility |
|---|---|---|
| 1 | 12 | 12 |
| 2 | 18 | 6 |
| 3 | P | 4 |
| 4 | 24 | 2 |
| 5 | 24 | Q |
What are the values of P and Q?
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → P = 22, Q = 0
Marginal utility of a unit = TU with that unit − TU without it.
MU3 = TU3 − TU2, so 4 = P − 18, P = 22
Q = MU5 = TU5 − TU4 = 24 − 24 = 0
TU does not change at the 5th unit, so MU is zero there.
NCERT (2026-27): “Measures of Utility … In general, MUn = TUn – TUn-1, where subscript n refers to the nth unit of the commodity …” “Notice that MU3 is less than MU2. You may also notice that total utility increases but at a diminishing rate: … Law of Diminishing Marginal Utility states that marginal utility from consuming each additional unit of a commodity declines as its consumption increases, while keeping consumption of other commodities constant. MU becomes zero at a level when TU remains constant. In the example, TU does not change at 5th unit of consumption and therefore MU5= 0. …” |