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Question
Distinguish between :
Total Utility and Marginal Utility Diminishing Marginal Utility.
Total Utility and Marginal Utility Diminishing Marginal Utility.
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Solution
Total utility refers to the total satisfaction obtained from the commodity of all possible units of a commodity. It measures the total satisfaction obtained from the consumption of all the 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.
Law of Diminishing Marginal Utility (DMU) states that as we consume more and more units of a commodity, the utility derived from each successive unit goes on decreasing.
Total utility refers to the total satisfaction obtained from the commodity of all possible units of a commodity. It measures the total satisfaction obtained from the consumption of all the 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.Law of Diminishing Marginal Utility (DMU) states that as we consume more and more units of a commodity, the utility derived from each successive unit goes on decreasing.
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