Marginal Utility
Marginal utility is an economic concept that refers to the additional satisfaction or benefit that a consumer receives from consuming one additional unit of a good or service. It is the change in total utility that results from consuming one additional unit of a good or service. In other words, it is the extra satisfaction or benefit that a consumer receives from consuming one more unit of a good or service.
History of Marginal Utility
The concept of marginal utility was first introduced by the Austrian economist, Carl Menger, in his book Principles of Economics in 1871. He argued that the value of a good or service is determined by the utility that it provides to the consumer. This utility is subjective and can vary from person to person. Menger argued that the value of a good or service is determined by the marginal utility that it provides to the consumer. This means that the value of a good or service is determined by the additional satisfaction or benefit that a consumer receives from consuming one additional unit of the good or service.
Comparison of Marginal Utility
| Good/Service | Marginal Utility |
|---|---|
| Coffee | 2 |
| Chocolate | 4 |
| Ice Cream | 6 |
Summary
Marginal utility is an economic concept that refers to the additional satisfaction or benefit that a consumer receives from consuming one additional unit of a good or service. It is the change in total utility that results from consuming one additional unit of a good or service. The concept of marginal utility was first introduced by the Austrian economist, Carl Menger, in his book Principles of Economics in 1871. For more information about this term, you can visit websites such as Investopedia, The Balance, and Khan Academy.
See Also
- Total Utility
- Utility Maximization
- Consumer Surplus
- Marginal Cost
- Marginal Revenue
- Marginal Rate of Substitution
- Marginal Propensity to Consume
- Marginal Propensity to Save
- Marginal Revenue Product
- Marginal Rate of Technical Substitution
