Total Utility and Marginal Utility

Total utility and Marginal utility are two important concepts of economics. Total utility is used to calculate the total satisfaction of a consumer while Marginal utility is used to find the addition or subtraction in the total utility. Total utility is defined as the happiness gained by a person from consuming goods and services. It can be calculated by measuring the quantity consumed and the pleasure derived from that commodity. Marginal utility signifies additional satisfaction obtained after consuming each additional unit of good or service.

Total Utility

Total utility is a concept which explains the satisfaction one derives due to the consumption of goods and services. It shows how much satisfaction a consumer gets from any given good or service based on quantity consumed and its price i.e., whether it is the normal price, discounted price, reduced price, etc. 

Significance of Total Utility

Total utility is a concept widely used in economics. It helps in calculating the satisfaction gained by a person from the consumption of goods and services or services. The total satisfaction is obtained by measuring the quantity consumed and the pleasure derived from that commodity. The total utility is a measure of the satisfaction one derives from consuming goods and services. It is a quantity that must be measured to calculate an individual’s utility.

Marginal Utility

Marginal utility is defined as the addition or subtraction in total utility from the consumption of any particular good or service when it comes to a particular person or group. It shows the level of satisfaction a consumer derives from any commodity, which is different from person to person.

Significance of Marginal Utility

Marginal utility is a concept widely used in economics. It helps in calculating the satisfaction gained by a person from the consumption of a particular good or service or services. The marginal utility is the difference between total utility and marginal utility when it comes to a particular person or group. The total satisfaction is obtained by measuring the quantity consumed and the pleasure derived from that commodity. The marginal utility signifies additional satisfaction obtained after consuming each additional unit of good or service because it gives an idea about the level of satisfaction attained by a consumer at any point in time.

Insights of Total Utility and Marginal Utility

The total utility and marginal utility must be measured in order to evaluate the satisfaction achieved by a consumer from the consumption of goods and services. It would be different from person to person or group to group depending on their taste, liking, demand and age. The total satisfaction is obtained by measuring the quantity consumed and the pleasure derived from that commodity. 

Difference between Total Utility and Marginal Utility

• Total utility and marginal utility are important concepts in economics
• Total utility means the satisfaction gained by a person from the consumption of goods or services
• Marginal utility is the addition or subtraction in total utility from the consumption of any particular good or service when it comes to a particular person or group
• Total satisfaction is obtained by measuring the quantity consumed and the pleasure derived from that commodity
• Total utility is “happiness” gained from consuming goods and services
• It can be calculated by measuring the quantity consumed and the pleasure derived from that commodity
• The marginal utility shows addition or subtraction in total satisfaction attained by a consumer at any point of time as he uses one more unit of commodity i.e. it signifies additional satisfaction obtained after consuming each additional unit of good or service
• The total utility and marginal utility must be measured in order to evaluate the satisfaction achieved by a consumer from the consumption of goods and services
• It would be different from person to person or group to group depending on their taste, liking, demand and age

Conclusion

The above concepts are widely used in economics and they help in calculating satisfaction gained by a person from the consumption of goods and services. This helps an individual to measure his total utility. However, it is important for a consumer to measure total utility because it helps in evaluating the satisfaction achieved by a consumer from the consumption of goods and services.