Practicing Success
Practicing Success
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After reaching the saturation point, what happens when we consume additional units of the commodity? |
Total utility falls and marginal utility to rises Both Total utility and marginal utility increases Total utility falls and marginal utility becomes negative Total utility becomes negative and marginal utility falls |
Total utility falls and marginal utility becomes negative |
Initially, as we start consuming a commodity the MU increases and so does the TU. After reaching the saturation point, TU is maximum and the MU is zero (which indicates no additional satisfaction with the consumption of an extra commodity). If we keep consuming beyond the maximum satisfaction level, then MU becomes negative and TU falls because it causes disutility to the consumer. |
