Question

After reaching the point of satiety, consumption of additional units of the commodity cause ______.

Options

• TU falls and MU increases

• Both TU and MU increase

• TU falls and MU falls and becomes negative

• TU becomes negative and MU falls

Answer 1

After reaching the point of satiety, consumption of additional units of the commodity cause TU falls and MU falls and becomes negative.

Explanation:

Beyond satiety, marginal utility becomes negative and total utility begins to fall. TU need not itself become negative.