Economics Marginal Utility Questions Medium
Total utility refers to the overall satisfaction or benefit that a consumer derives from consuming a certain quantity of a good or service. It represents the sum of the marginal utilities obtained from each unit consumed. In other words, it measures the total amount of satisfaction gained from consuming a specific quantity of a good.
On the other hand, average utility is the total utility divided by the quantity of the good consumed. It represents the average level of satisfaction obtained per unit of the good consumed. Average utility provides an indication of the satisfaction experienced on average for each unit consumed.
The key difference between total utility and average utility lies in their focus. Total utility looks at the overall satisfaction obtained from consuming a certain quantity of a good, while average utility focuses on the average level of satisfaction per unit consumed. Total utility provides a broader perspective on the overall satisfaction gained, while average utility provides a more specific measure of satisfaction per unit consumed.