Economics · Utility Concepts and Saturation Point
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: Total Utility (TU) reaches its maximum level, known as the point of saturation, when the Marginal Utility (MU) derived from the last unit consumed is zero. Reason R: If a consumer continues to consume units of a commodity beyond the point of saturation, the Marginal Utility becomes negative, which results in a further increase in the Total Utility. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct and R is the correct explanation of A
- 2Both A and R are correct but R is NOT the correct explanation of A
- 3A is correct but R is not correct✓
- 4A is not correct but R is correct
Correct answer
A is correct but R is not correct
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