Marginal utility is the extra satisfaction a consumer gets from an additional unit of a particular product. This is not to be confused with Total Utility, which is the total amount of satisfaction a consumer gets from consuming a specific quantity of a product. Marginal utility is important in economics because it affects the demand on a product and helps to explain why the Demand Curve is shaped like it is.

If the marginal utility of a product laid out for analysis, an interesting thing occurs. The additional satisfaction from each new unit of a particular product consumed decreases until it becomes negative. This is in fact the Law of Diminishing Marginal Utility.

Log in or register to write something here or to contact authors.