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  Marginal Utility

Marginal Utility:

Marginal Utility is the adding up made to the net utility by consuming one more unit of a commodity. For illustration, when a consumer consumes 10 biscuits, the marginal utility is the utility derived from the 10th unit. This is nothing except the net utility of 10 biscuits minus the net utility of 9 biscuits.

Therefore,

MUn = TUn – TUn-1

Here,

MUn = Marginal Utility of ‘nth’ commodity.
TUn = Net Utility of n units.
TU n-1 = Net Utility of n-1 units.

Table: Relationship between Marginal Utility and Total Utility

1389_marginal utility.jpg

 

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