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When marginal utility is zero, the total utility is – (a) Minimum (b) Increasing (c) Maximum (d) Decreasing
By BYJU'S Exam Prep
Updated on: September 25th, 2023
When marginal utility is zero, the total utility is maximum. Marginal utility is the measure of the additional happiness that a customer gets from consuming more units of goods or services. Economists utilize the idea of marginal utility to estimate the quantity of a good that consumers will buy.
The overall utility increases when an extra item is consumed, whereas the total utility lowers when an additional item is consumed, resulting in positive or negative marginal utility. When having more of an item doesn’t increase satisfaction, this is known as zero marginal utility. For instance, if you get two copies of the same magazine issue, there isn’t much-added value in the second copy.
Table of content
Types of marginal utility
Different types of marginal utility exist. The following are three of the more typical ones:
Positive Marginal Utility
When more of anything makes you happier than you already are, this is known as positive marginal utility. Let’s say you enjoy a slice of cake, but a second slice would make you happier. Therefore, you will receive a positive marginal utility from eating cake.
Zero Marginal Utility
When more of an item is consumed without producing any additional enjoyment, this is known as zero marginal utility. For instance, after two slices of cake, you would feel somewhat satisfied and after a third, you wouldn’t really feel much better. Your marginal value from eating cake in this situation is zero.
Negative Marginal Utility
When you have too much of something, eating more of it is really harmful. This is known as negative marginal utility. For instance, after eating three slices of cake, the fourth one can potentially make you feel nauseous.
Therefore, total utility is maximum when marginal utility is zero.
Summary:
When marginal utility is zero, the total utility is – (a) Minimum (b) Increasing (c) Maximum (d) Decreasing
The maximum total utility is reached when the marginal utility is zero. The additional satisfaction that a consumer receives from consuming more units of products or services is measured by marginal utility.
