1. What is Marginal Utility?

Marginal Utility (MU) is the additional satisfaction or benefit a consumer gains from consuming one more unit of a good or service. It's a fundamental concept in microeconomics that helps explain consumer choice behavior.

2. How Does the Calculator Work?

The calculator uses the Marginal Utility formula:

Where:

• \( MU \) — Marginal Utility (utils/unit)
• \( \Delta TU \) — Change in Total Utility (utils)
• \( \Delta Q \) — Change in Quantity (units)

Explanation: The formula calculates how much additional utility is gained per additional unit consumed.

3. Importance of Marginal Utility

Details: Understanding marginal utility helps explain the law of diminishing marginal utility, consumer equilibrium, and forms the basis for demand curves in economics.

4. Using the Calculator

Tips: Enter the change in total utility (in utils) and the change in quantity consumed (in units). The change in quantity must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between total utility and marginal utility?
A: Total utility is the overall satisfaction from consuming all units, while marginal utility is the additional satisfaction from consuming one more unit.

Q2: What does negative marginal utility mean?
A: Negative MU means consuming an additional unit actually decreases total satisfaction, which can happen with overconsumption.

Q3: What is the law of diminishing marginal utility?
A: The principle that as consumption increases, the marginal utility derived from each additional unit tends to decrease.

Q4: How is marginal utility used in practice?
A: Businesses use MU concepts to set prices, and economists use it to analyze consumer behavior and market demand.

Q5: Can marginal utility be zero?
A: Yes, when consuming an additional unit provides no additional satisfaction (total utility remains unchanged).