Question

Establish relationship between Marginal utility and Total utility with the help of an example and diagram.

Hint:

Where TU is maximum, MU = 0; before that MU $>$ 0 (TU rising), after that MU $<$ 0 (TU falling).

Answer 1

Idea: Total Utility (TU) is the cumulative satisfaction from all units consumed; Marginal Utility (MU) is the additional satisfaction from the last unit: $MU_n=TU_n-TU_{n-1}$. As more units are consumed, MU generally diminishes. When MU is positive, TU rises; when MU falls to zero, TU reaches its maximum; when MU becomes negative, TU declines.
Example (table):
Quantity: 1,\;2,\;3,\;4,\;5,\;6
TU: \;10,\;18,\;24,\;28,\;30,\;29
MU: \;10,\;8,\;6,\;4,\;2,\;-1
Here MU shrinks with each unit; at the 5th unit MU $=0$ and TU peaks at $30$; the 6th unit yields MU $<0$, so TU falls.
Diagram (verbal): The TU curve starts from the origin, increases at a diminishing rate, becomes flat at its peak (where MU curve cuts the quantity axis at MU$=0$), and then bends downward if consumption continues. The MU curve slopes downward, crossing zero at TU's maximum.