Question

Explain if marginal utility can be negative.

Answer 1

Marginal utility is the additional utility received from consumption of one more unit of a good. It can be negative because it is possible that a person starts receiving disutility from consuming something. When there is a disutility it indicates that utility is falling and hence marginal utility is negative.

Also note that total utility first increases at increasing rate, then increases at decreasing rate and finally starts falling. It is this portion of falling total utility in which marginal utility turns negative.