Marginal Utility
Marginal Utility Meaning:
Refers to the change in utility (that is, satisfaction) that comes with an increase or decrease in the amount available of that good or service.
Refers to the change in utility (that is, satisfaction) that comes with an increase or decrease in the amount available of that good or service.
Because people can be expected to satisfy their most pressing needs first, marginal utility normally declines with increasing availability of a good or service. A simple example is money. If someone has no money then $100 has a marginal utility of $100 to them, as they can be expected to spend it on the basic necessities of life. If someone already has $100,000, then $100 has very little marginal utility to them, perhaps far less than $100.