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anonymous

  • one year ago

Why is the term marginal important in utility analysis

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  1. madhu.mukherjee.946
    • one year ago
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    Because 'marginal' implies that the satifaction (utility) from consuming an additional good continuously gets smaller and smaller. Whereas utility primarily looks at the overall satisfaction gained

  2. madhu.mukherjee.946
    • one year ago
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    The utility gained from consuming the last unit of a good. For example, if you consume one cake, your marginal utility may be quite high – say 10 units of satisfaction If you consume a second cake (in same day) your marginal utility of the second cake is likely to fall quite a bit to say +2 If you consume three cakes, you may even start to feel ill and get negative utility from a third cake.

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