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Explain the relationship between TU &MU? |
Answer» When TU increases at increasing rate then MU attains its maximum point and starts falling.WhenTU attains its maximum point then MU become zero.When TU starts falling then MU become negative.<br>UTILITY - Utility refers to the amount of satisfaction derived from the consumption of the unit of the product.TOTAL UTILITY - Total utility refers to the total amount of satisfaction obtained from the consumption of number of products.MARGINAL UTILITY - Marginal utility is the amount of satisfaction which is derived from the consumption of every additional unit.Difference between Total Utility and Marginal Utility.when TU decrease, MU increases.when TU becomes zero, MU become stagnant.when TU becomes negative, MU falls.Total utility talks about the whole other hand\'s marginal utility talk about the single unit. | |