1.

Define total utility. How is marginal utility derived from total utility?

Answer»

Total Utility is the sum total of utility derived from the consumption of all the units of a commodity.

TU =  MU1+ MU2+ MU3 = + .......... +………………+ 123 MUn 

or TU MU n n = ∑MUn

Marginal Utility is derived from Total Utility as :

 MU = TUn - TU(n-1) or MU = ΔTU/ΔQ



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