Quantified Marginal Utility

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Definition: Quantified Marginal Utility

Marginal utility is the additional satisfaction that a person gets on consumption of an additional unit of goods or service.

For example, when a child consume an additional unit of ice cream. The satisfaction that he gets from this consumption is the marginal utility of the ice cream.

But as you consume the additional unit of the same good more and more the person satisfaction level decreases.  The satisfaction that the child gets from consumption of the first unit of ice cream, the same satisfaction he does not gets when he consumes the 5th unit of ice cream.

 

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