ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Total Utility is maximum only when marginal utility is zero, because at that point any additional unit consumed will lead to a decrease in overall satisfaction.

Detailed explanation-2: -When marginal utility (MU) is zero, total utility (TU) diminishes.

Detailed explanation-3: -Zero marginal utility is when having more of an item brings no extra measure of satisfaction. For example, if you receive two copies of the same issue of a magazine, that extra copy has little added value. Thus, with zero marginal utility, total utility is Maximum.

Detailed explanation-4: -If marginal utility is positive then total utility will increase. Once marginal utility is negative, then total utility will decrease.

Detailed explanation-5: -Marginal utility is the defined as the change in total utility resulting from one additional unit consumed. For utility to be maximized the marginal product should be 0. As if marginal utility ≥ 0 it is beneficial to increase consumption. If marginal utility ≤ 0 it is beneficial to decrease consumption.