When marginal utility is zero, total utility is
A) increasing.
B) at its maximum.
C) at its minimum.
D) decreasing.

Question

Quizplus · Accepted Answer

When marginal utility is zero, total utility is at its maximum. This occurs because marginal utility is the additional utility gained from consuming one more unit of a good or service. As consumption continues, marginal utility will eventually decrease and approach zero, but the total utility will continue to increase until it reaches its maximum point. After reaching the maximum point, further consumption will lead to a decrease in total utility.

When Marginal Utility Is Zero, Total Utility Is