Marginal Utility

EconomicsDecision MakingOptimization

Marginal Utility measures the additional satisfaction gained from consuming one more unit of a good or service.

Introduction

Marginal Utility measures the additional satisfaction gained from consuming one more unit of a good or service.

Core Concepts

  1. Diminishing Returns: Additional consumption yields lower incremental benefits.
  2. Consumer Choice: Balancing marginal utility and cost.
  3. Optimal Allocation: Allocating resources for maximum satisfaction.

Applications

  • Pricing strategy for consumer products.
  • Personal finance for spending decisions.

Related Resources

  • Book: "Principles of Economics" by Alfred Marshall.
  • Tools: Utility analysis charts.

Related Topics

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