As long as marginal utility is positive; total utility must be?

A. negative
B. increasing
C. zero
D. decreasing

Correct Answer:

Option B – increasing

Explanation

When marginal utility diminishes but stays positive, then total utility increases at a decreasing rate as it is the summation of all marginal utilities.

This is because positive marginal utility occurs when the consumption of an additional item increases the total utility. Hence whenever marginal utility is positive, total utility increases.