State the following statement is True or False: MU and TU are equal a

State the following statement is True or False: MU and TU are equal at the initial stage.OptionsTrueFalse

Answer»

MU and TU are equal at the initial stage. -True

Explanation: Total utility TU refers to the aggregate utility, or the summation of utility, derived from the consumption of all the units of a commodity. Algebraically, TU_n = MU₁ + MU₂ + MU₃ +.............. + MU_n = ∑MU At the initial stage i.e. at the first unit of consumption, Marginal Utility MU and Total Utility TU are equal. That is, MU = TU.

Number of Units Consumed of Commodity (X)	Total Utility (TU) (utils)	Marginal Utility (MU) MU_n = TU_n − TU_n − 1 (utils)
1	50*	50 − 0 = 50*
2	100	100 − 50 = 50
3	130	130 − 100 = 30

* TU and MU are equal at the initial phase.

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