It is defined as the change in the total utility resulting form a one unit change in the consumption of commodity per unit of time.
When man is purchasing a commodity, he is consciously or weighting in h9is mind the price he has to pay and the utility of each unit that he buys.
He will continue purchasing till the marginal utility equals the price. Here is a fundamental proposition of the theory of customer demand. A consumer will exchange money for units of any commodity A, up to the point where the last (marginal) unit of A which he buys has for him a marginal significance in terms of money just equal to its money price.
Be the first to comment on "Marginal utility"