Definition

1. Noun:
   • The additional satisfaction or benefit gained from consuming one more unit of a good or service: In economics, "marginal utility" refers to the increase in total utility (satisfaction or usefulness) that a person receives from consuming an additional unit of a specific good or service within a given period.

Usage Examples

• Noun:
  • The concept of diminishing marginal utility explains why the first slice of pizza brings more satisfaction than the fourth.
  • Economists calculate marginal utility to understand consumer choice and demand.
  • For him, the marginal utility of another cup of coffee was very low, as he was already quite alert.

Advanced Usage

• Law of Diminishing Marginal Utility: This fundamental economic principle states that as a person consumes more units of a good, the marginal utility from each additional unit eventually decreases.

  • The law of diminishing marginal utility helps explain why demand curves typically slope downward.

• Marginal Utility per Dollar: A concept used in consumer equilibrium analysis, comparing the marginal utility derived from a good to its price.

  • A rational consumer will allocate spending so that the marginal utility per dollar is equal for all goods purchased.

Variants and Related Words

• Utility (n): The total satisfaction or benefit derived from consuming a good or service.

  • The utility of a product is subjective and varies from person to person.

• Marginal (adj): Relating to or resulting from small or incremental changes.

  • The marginal cost of production is the cost of producing one more unit.

Synonyms

• Incremental benefit: The extra advantage gained from an additional unit.
• Additional satisfaction: The extra pleasure or usefulness obtained.

Related Concepts (Not Phrasal Verbs)

• Marginal analysis: The examination of the additional benefits of an activity compared to the additional costs incurred.
• Total utility: The aggregate satisfaction from consuming a given quantity of a good or service.

Noun

1. (economics) the amount that utility increases with an increase of one unit of an economic good or service