0Basic Terms:
1.Utility:It refers to want satisfying power of the commodity.It is measured in utiles.
2.Types of Utilities:
- Tototal Utility: It refers to sum total of utility that is received from all units of a commodity.
- Marginal utility: It refers to utility received from an additional unit of a commodity.
Relationship between TU AND MU:
1. When TU is increasing, MU is falling but positive.
2. When TU is maximum and constant, MU is zero
3. When TU falls but positive, MU is falling and negative.
