Economics Marginal Utility Questions Medium
The relationship between total utility and marginal utility is that total utility is the overall satisfaction or benefit derived from consuming a certain quantity of a good or service, while marginal utility refers to the additional satisfaction or benefit gained from consuming one additional unit of that good or service.
In other words, total utility is the cumulative sum of all the marginal utilities obtained from consuming each unit of a good or service. As more units of a good or service are consumed, the total utility generally increases, but at a decreasing rate. This is because as consumption increases, the marginal utility tends to decrease.
The concept of diminishing marginal utility explains this relationship. It suggests that as individuals consume more of a good or service, the additional satisfaction or benefit derived from each additional unit diminishes. This is due to factors such as satiation, where the individual's desire for the good or service decreases as they consume more of it, or the presence of substitutes that may offer alternative sources of satisfaction.
Therefore, the relationship between total utility and marginal utility is that total utility is the sum of all the marginal utilities, and the marginal utility decreases as total utility increases.