Total utility is maximum when

Marginal utility is zero
Marginal utility is at its highest point
Marginal utility is equal to average
Average utility is maximum

The correct answer is A. Marginal utility is zero.

Marginal utility is the additional satisfaction or benefit that a consumer receives from consuming one more unit of a good or service. Total utility is the total satisfaction or benefit that a consumer receives from consuming all units of a good or service.

When marginal utility is zero, the consumer is getting the maximum satisfaction from consuming the good or service. Consuming any more units of the good or service will not increase the consumer’s satisfaction.

Option B is incorrect because marginal utility is at its highest point when the consumer is not getting the maximum satisfaction from consuming the good or service. Consuming more units of the good or service will increase the consumer’s satisfaction until marginal utility reaches zero.

Option C is incorrect because marginal utility is equal to average utility when the consumer is getting the average amount of satisfaction from consuming the good or service. This is not necessarily the point at which total utility is maximum.

Option D is incorrect because average utility is maximum when the consumer is getting the most satisfaction per unit of the good or service. This is not necessarily the point at which total utility is maximum.

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