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Explain with the help of a diagram the relationship between total utility and marginal utility.

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(i) Total utility increases with an increase in consumption as long as MU is positive.

(ii) When TU reaches its maximum, MU becomes zero. This is known as point of satiety. 

(iii) When consumption is increased beyond the point of satiety, TU starts falling as MU become negative. 

(iv) MU curve has a negative slope, while TU curve has a positive slope upto point ‘B’.

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