Q.Define Marginal Utility and state its formula.

MU of a commodity becomes negative when its TU is falling — that is, only after the point of maximum total utility (saturation) has been crossed.

Marginal utility is the change in total utility from consuming one additional unit of a commodity (MU of the nth unit = TU of n units minus TU of (n-1) units). As a consumer keeps consuming more units:

• While TU rises, MU is positive (though diminishing).
• When TU is maximum, MU is zero — this is the point of satiety. …

The economic term is Marginal Utility (MU) — the extra satisfaction a consumer derives from consuming one additional unit of a commodity.

Utility is the want-satisfying power of a good. Two related measures are used:

• Total Utility (TU) — the total satisfaction obtained from consuming all the units of a commodity.
• Marginal Utility (MU) — the addition made to total utility by consuming one more unit, i.e. MU = change in TU / change in units consumed. …