utility goes on diminishing with the consumption of every successive glass of

Utility goes on diminishing with the consumption of

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utility goes on diminishing with the consumption of every successive glass of water till it drops down to zero. It is the position of consumer’s equilibrium or maximum satisfaction. If the consumer is forced further to take a glass of water, it leads to disutility causing total utility-to decline. The marginal utility will become negative. A rational consumer will stop taking water at the point at which marginal utility becomes negative even if the good is free. In short, when a good is free, a consumer increases consumption of a good so long its additional units provide him positive marginal utility. 10. The following table will make the law of diminishing marginal utility more clear. Units Total Utility Marginal Utility 1st glass 20 20 2nd glass 32 12 3rd glass 40 8 4th glass 42 2 5th glass 42 0 6th glass 39 –3 11. From the above table, It is clear that in a given span of time :- • The first glass of water to a thirsty man gives 20 units of utility. • When he takes second glass of water, the marginal utility goes down to 12 units. • When he consumes fifth glass of water, the marginal utility drops down to zero and if the consumption of water is forced further from this point, the utility changes into disutility (–3). • Here it may be noted that the utility of the successive units consumed diminishes not because they are of inferior in quality than that of others. We assume that all the units of a commodity consumed are exactly alike.
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