AT THE HIGHEST LEVEL OF TOTAL UTILITY, MARGINAL UTILITY IS

A. negative
B. positive and falling
C. positive and rising
D. zero ✓

At the highest level of total utility, the marginal utility is zero. This concept is derived from the law of diminishing marginal utility, which states that as a person consumes more units of a good or service, the additional satisfaction or benefit gained from each additional unit decreases.

When total utility is maximized, it means that the consumer has reached a point where they are maximizing their overall satisfaction from consuming a particular good or service. At this point, the marginal utility becomes zero because consuming any additional unit would not add any extra satisfaction or utility to the consumer.

If the marginal utility were negative, it would imply that consuming an additional unit would actually decrease the total utility, which goes against the basic principles of consumer behavior and rational decision-making.

In other words, this means that when total utility reaches its peak, the marginal utility becomes zero because any additional unit consumed does not add any extra satisfaction or benefit to the consumer.

Marginal utility is the additional satisfaction or benefit that a consumer derives from consuming one more unit of a good or service. It is closely related to total utility, which is the overall satisfaction or benefit that a consumer receives from consuming all units of a good or service. As a consumer consumes more units of a good or service, the total utility increases, but at some point, it reaches a maximum level where the marginal utility becomes zero.

When total utility is at its highest level, it means that the consumer has maximized their satisfaction from consuming the good or service. At this point, consuming any additional unit would not increase the total satisfaction because the marginal utility is zero. This concept is important in economics as it helps to explain consumer behavior and decision-making when it comes to consumption choices.