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Question : Which of the following statement is not true?

Option 1: As long as MU is positive, TU increases

Option 2: TU is zero when MU is zero

Option 3: TU starts decreasing when MU is negative

Option 4: After the point of satiety, MU becomes negative


Team Careers360 22nd Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: After the point of satiety, MU becomes negative


Solution : The correct answer is (d) After the point of satiety, MU becomes negative.

After the point of satiety, which is the point where the consumer reaches maximum satisfaction or utility from consuming a good, the marginal utility (MU) does not become negative. Instead, the marginal utility becomes zero. At the point of satiety, the consumer no longer derives any additional satisfaction from consuming more units of the good, but the marginal utility remains zero.

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