When Total Utility Is At A Maximum, Marginal Utility Is:

September 17, 2022

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Total utility is the sum of marginal utilities of all such individual items. The primary concern of a customer is to derive the largest amount of utility with the least cost incurred. To understand total utility, we must look into the concept of the law of diminishing marginal utility. The total utility is maximum when marginal utility is zero.

The relationship between total utility and marginal utility is plotted in diagram, given as below: (i) the total utility curves starts at the origin as zero consumption of apples yield zero utility. (ii) the tu curve reaches at its maximum or a peak of m when mu is zero. A rational consumer wishes to consume only 5 mangoes when marginal utility is zero and total utility is maximum. We can draw the following conclusions from the above table. Total utility is the utility derived from the consumption of all the units of a commodity. It increases as the consumer takes more and more units. The relation between total and marginal utility is explained with the help of table 1. So long as total utility is increasing, marginal utility is decreasing up to the 4th unit.