Question

Formula for calculation of marginal utility is _______.

• A. $M{U}_n=T{U}_n-T{U}_{n+1}$
• B. $M{U}_n=T{U}_{n+1}-T{U}_{n-1}$
• C. $M{U}_n=T{U}_n-T{U}_{n-1}$
• D. none of the above

Answer 1

The correct option is C $M{U}_n=T{U}_n-T{U}_{n-1}$

Marginal utility refers to the additional satisfaction that the consumer receives on consumption of an extra unit of a commodity. It is calculated by subtracting the total utility of an unit by the total utility of the previous unit. It can also be represented to be amount of change in total utility, while the change in units of consumption remains to be one.