As more of a product is consumed, total utility increases until
A) marginal utility increases at an increasing rate.
B) average utility increases at an increasing rate.
C) marginal utility is negative.
D) average utility decreases.

Question

Quizplus · Accepted Answer

Marginal utility refers to the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service. As more of a product is consumed, total utility increases at a decreasing rate until marginal utility becomes negative, indicating that consuming more of the product actually decreases overall satisfaction. This concept is rooted in the law of diminishing marginal utility.

As More of a Product Is Consumed, Total Utility Increases