Marginal utility is maximized when total utility is infinity.

Question

Quizplus · Accepted Answer

Marginal utility is maximized when it is equal to zero, not when total utility is infinity. This is because as the quantity consumed increases, the marginal utility eventually decreases, indicating that each additional unit consumed provides less and less additional satisfaction. Marginal utility is maximized when the additional satisfaction gained from consuming one extra unit of a good equals the decrease in satisfaction gained from consuming one less unit of the same good. It does not necessarily need to be at the point of total utility infinity, as total utility may continue to increase even after marginal utility starts to decrease. Therefore, the statement is false.

Marginal Utility Is Maximized When Total Utility Is Infinity