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Question
Answer the following question briefly:
Define total utility. How is marginal utility derived from the total utility?
Define total utility. How is marginal utility derived from the total utility?
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Solution
Total utility is the sum total of utility derived from the consumption of all units of a commodity.
Marginal utility is the additional utility derived from the consumption of one more unit of the given commodity. It is the utility derived from the last unit of a commodity purchased.
Marginal Utility = Change in total utility / change in number of units consumed or MUn = TUn - TU(n-1)
Total utility is the sum total of utility derived from the consumption of all units of a commodity.
Marginal utility is the additional utility derived from the consumption of one more unit of the given commodity. It is the utility derived from the last unit of a commodity purchased.
Marginal utility is the additional utility derived from the consumption of one more unit of the given commodity. It is the utility derived from the last unit of a commodity purchased.
Marginal Utility = Change in total utility / change in number of units consumed or MUn = TUn - TU(n-1)
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