GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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is zero
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increase
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decrease
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is negative
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Detailed explanation-1: -When marginal utility is negative, then total utility will decrease. This means that an individual does not derive any satisfaction from the consumption of an additional unit of a good or service and is worse off by doing so.
Detailed explanation-2: -As long as MU (marginal utility) is positive, the TU (total utility) increases with an increase in the consumption of a commodity. As MU from each successive unit diminishes, at that time TU increases but at a diminishing rate. When TU is maximum, the MU reaches zero.
Detailed explanation-3: -Answer and Explanation: Yes, it is possible for the marginal utility to be negative while the total utility is positive. Total utility is the sum of the utility derived from each unit that has been consumed until now while the marginal utility is the utility that will be derived from the next unit that is consumed.