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What is the diffrence and relation …

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What is the diffrence and relation between total utility and marginal utility?

  • 1 answers

Payal Singh 6 years, 8 months ago

The significant differences between total and marginal utility are explained in the points given below:

  • Total Utility means overall benefit obtained by a person from consumption of goods and services. Marginal Utility means the amount of utility a person gets from the consumption of each successive unit of a commodity.
  • In general, the total utility increases as more of a commodity is consumed. As against this, the marginal utility decreases with each additional unit of a commodity consumed.
  • There is a certain saturation point of satisfaction, where the consumer no longer gains satisfaction with the consumption of the commodity, once that point has reached. This shows that total utility suffers from decreasing returns. Unlike marginal utility, which declines with each additional unit of the commodity consumed.

Relationship:Look at the below-given schedule and diagram, to understand three important relationships between total utility and marginal utility:

UNITS CONSUMED TOTAL UTILITY (TU) MARGINAL UTILITY (MU)
1 30 30
2 56 26
3 76 20
4 88 12
5 90 2
6 90 0
7 86 -4
8 78 -8

  • When the marginal utility is positive, total utility is increasing (from unit 1 to 5).
  • When the marginal utility is zero, total utility is maximum (At 6th unit).
  • When marginal utility is negative, total utility is decreasing (Unit 7 & 8)
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