The table below presents the Total Utility (TU) obtained by a consumer from consuming successive bottles of sparkling water: | Quantity (Q) | Total Utility (TU) in utils | | :---: | :---: | | 1 | 16 | | 2 | 30 | | 3 | 40 | | 4 | 46 | | 5 | 46 | | 6 | 40 | Based on the table above, at which unit of c

The table below presents the Total Utility (TU) obtained by a consumer from consuming succ… — JAMB UTME

The table below presents the Total Utility ( $TU$ ) obtained by a consumer from consuming successive bottles of sparkling water:

Based on the table above, at which unit of consumption does the consumer reach the point of satiety?

The consumer reaches the point of satiety at the 5th unit of consumption.

The correct answer identifies the 5th unit because the point of satiety occurs when Marginal Utility (

MU = \Delta TU / \Delta Q

) drops to zero and Total Utility (

TU

) reaches its absolute peak. Calculating

MU

for the 5th unit gives

MU_5 = 46 - 46 = 0

utils.

Calculate the Marginal Utility (

MU

) for each unit using the formula

MU_n = TU_n - TU_{n-1}

MU_1 = 16

MU_2 = 14

MU_3 = 10

MU_4 = 6

MU_5 = 0

MU_6 = -6

Marginal Utility measures the change in Total Utility from consuming one additional unit.

Identify the point of satiety by finding where Marginal Utility (

MU

) equals zero and Total Utility (

TU

) is maximized.

Q = 5

MU = 0

and

TU = 46

(maximum).

The point of satiety is defined as the consumption level where consumer satisfaction is maximized and additional consumption yields no extra utility.

Point of Satiety in Law of Diminishing Marginal Utility