When marginal utility is zero, the total utility is
When the marginal utility is zero, what is the total utility?
- Minimum
- Increasing
- Maximum
- Decreasing
Answer: Maximum
When ‘marginal utility’ is zero, ‘total utility’ is maximum.
Marginal utility measures the extra utility (or satisfaction) from consuming an additional unit of a product.
Total utility is the total satisfaction from the consumption of a product.
According to the Law of Diminishing Marginal Utility, total utility increases at a diminishing rate. When marginal utility is zero this means there is no increase in total satisfaction from the consumption of that unit. So the total utility is at maximum.
For instance, suppose a person is hungry and wants to eat. The first apple that he is going to eat would give him maximum satisfaction. Second apple would also give him utility but lesser than the utility he got from eating first one since his hunger is somewhat satisfied. This would hold for additional apples and it is just possible that after say 4 apples, the 5th one gives him zero utility since his stomach is full now and negative utility from 6th apple onwards. And total utility which is a sum of all marginal utilities would decline after such a point because of negative additions to total utility.
