If marginal utility is zero
A) total utility increases at a decreasing rate.
B) total utility increases at an increasing rate.
C) total utility is at a maximum.
D) people will consume more of the good only if the price is zero.

Question

Quizplus · Accepted Answer

When marginal utility is zero, total utility is at a maximum. This is because marginal utility measures the additional satisfaction gained from consuming one additional unit of a good. When marginal utility is zero, there is no additional satisfaction gained from consuming more units, meaning total utility cannot increase any further. Therefore, the answer is C, total utility is at a maximum.

If Marginal Utility Is Zero