A consumer's total utility from consuming successive cups of tea is given below. Work out the marginal utility for each cup and state at which cup the point of maximum total utility is reached.

| Cups of tea | Total Utility (utils) |
|---|---|
| 1 | 20 |
| 2 | 36 |
| 3 | 48 |
|

Question

A consumer's total utility from consuming successive cups of tea is given below. Work out the marginal utility for each cup and state at which cup the point of maximum total utility is reached.

| Cups of tea | Total Utility (utils) |
|---|---|
| 1 | 20 |
| 2 | 36 |
| 3 | 48 |
| 4 | 52 |
| 5 | 52 |
| 6 | 48 |

Accepted Answer

**Step 1 — compute Marginal Utility using $MU_n = TU_n - TU_{n-1}$** (taking $TU_0 = 0$ before the first cup):

| Cups | TU | MU |
|---|---|---|
| 1 | 20 | 20 − 0 = 20 |
| 2 | 36 | 36 − 20 = 16 |
| 3 | 48 | 48 − 36 = 12 |
| 4 | 52 | 52 − 48 = 4 |
| 5 | 52 | 52 − 52 = 0 |
| 6 | 48 | 48 − 52 = −4 |

**Step 2 — independent check (working forward from MU back to TU):** starting from MU of the first cup (20) and cumulating — 20, +16=36, +12=48, +4=52, +0=52, −4=48 — reproduces the given TU column exactly, confirming the MU figures are internally consistent.

**Step 3 — interpret:**
- MU is **positive but continuously falling** from the 1st through the 4th cup (20 → 16 → 12 → 4) — the Law of Diminishing Marginal Utility is already operating from the 2nd cup itself. …

Cups	TU	MU
1	20	20 − 0 = 20
2	36	36 − 20 = 16
3	48	48 − 36 = 12
4	52	52 − 48 = 4
5	52	52 − 52 = 0
6	48	48 − 52 = −4

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