Asked by Vivian Terziario on Jun 10, 2024
Verified
If a product has a diminishing, but positive, marginal utility, then
A) total utility decreases at an increasing rate.
B) total utility will become negative.
C) total utility increases at a diminishing rate.
D) total utility decreases at a diminishing rate.
Marginal Utility
The boost in satisfaction or usefulness one gets from consuming an extra unit of any good or service.
Total Utility
The total satisfaction or benefit that a consumer derives from consuming a certain quantity of goods or services.
- Attain an understanding of and apply the concept of marginal utility.
- Explain the relationship between total utility, marginal utility, and consumer choice.
Verified Answer
TG
Teresa GiglioJun 10, 2024
Final Answer :
C
Explanation :
When a product has a diminishing, but positive, marginal utility, it means that each additional unit of the product consumed provides less additional satisfaction than the previous one, but still adds some level of satisfaction. Therefore, total utility continues to increase, but at a slower (diminishing) rate with each additional unit consumed.
Learning Objectives
- Attain an understanding of and apply the concept of marginal utility.
- Explain the relationship between total utility, marginal utility, and consumer choice.
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