Q83
Total utility is maximum when
A.
Marginal utility is zero
AnswerB.
Marginal utility is at its highest point
C.
Marginal utility is equal to average
D.
Average utility is maximum
Answer: Option A
Solution
Answer: Option A
Solution:
Total utility is maximum when Marginal utility is zero. It is based in the law of diminishing marginal utility which says 'as more and more units of a good are consumed, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to fall.