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

Question

Quizplus · Accepted Answer

Positive marginal utility means that each additional unit of a good consumed adds some value to the total utility. However, diminishing marginal utility implies that the additional value added by each extra unit decreases as more is consumed. Therefore, total utility is still increasing, but at a decreasing rate.

If Marginal Utility Is Positive but Diminishing, Then