Post Utme Bells University 2021 Commerce Question 6

Practice objective / multiple choice question 6 from the 2021 Post Utme Bells University Commerce examination.

Post Utme Bells University 2021 Commerce Objective / Multiple Choice
Question 6 POST_UTME_BELLS_UNIVERSITY • 2021 • COMMERCE • objective

In a perfectly competitive market, the law of diminishing marginal utility implies that as the quantity of a good increases, the marginal utility of each additional unit decreases. However, this does not necessarily mean that the total utility of the good will also decrease. Explain why.

Answer Options

A. The total utility of the good will always decrease as the quantity increases.
B. The total utility of the good will remain constant as the quantity increases.
Correct Answer C. The total utility of the good will increase as the quantity increases, but at a decreasing rate.
D. The total utility of the good will decrease as the quantity increases, but at a decreasing rate.
Correct Answer
C
Correct Option:
The total utility of the good will increase as the quantity increases, but at a decreasing rate.

About This Question

This is Post Utme Bells University 2021 Commerce Question 6. It is one of the objective questions from the 2021 Post Utme Bells University Commerce examination.

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