If marginal utility is positive but diminishing, then
A) average utility must be negative.
B) marginal utility must be above-average utility.
C) total utility must be positive.
D) marginal utility must be more than total utility.

Question

Quizplus · Accepted Answer

If marginal utility is positive, then each additional unit consumed is providing additional satisfaction to the consumer. However, if it is diminishing, this means that each additional unit provides less satisfaction than the previous one. As long as marginal utility remains positive, total utility will continue to increase. Therefore, total utility must be positive.

If Marginal Utility Is Positive but Diminishing, Then