What does it indicate when marginal utility equals zero?

Multiple choice question for Supply and Demand. Select an option, then review the explanation below.

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The overall utility is zeroConsuming one more unit will reduce total utilityConsuming an additional unit will raise total utilityThe total utility has reached its highest point

Explanation

When marginal utility is zero, it means that consuming one more unit does not increase total utility, indicating that total utility is at its maximum level.

Practice related questions from the same subject.

1.What is the typical shape of a demand curve?
2.What term describes a company earning profits beyond its normal profit level?
3.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?
4.Marginal revenue refers to the ________ resulting from producing an additional ________ of output.
5.What are firms generally assumed to do with their costs and profits?

What does it indicate when marginal utility equals zero?

Explanation

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