Total Utility

Total utility is the total satisfaction that a consumer gets from consuming a given amount of a good or service. It is calculated by adding up the marginal utilities of each unit of the good or service consumed.

The marginal utility of a good or service is the additional satisfaction that a consumer gets from consuming one more unit of the good or service. Marginal utility decreases as more of a good or service is consumed, because the first few units of a good or service are the most satisfying.

Total utility is a concept that is used in economics to explain how consumers make decisions about what to buy. Consumers will choose to buy goods and services that give them the most total utility.

The law of diminishing marginal utility states that the marginal utility of a good or service decreases as more of the good or service is consumed. This means that the first few units of a good or service are the most satisfying, and the additional satisfaction that consumers get from each additional unit decreases.

The law of diminishing marginal utility is important because it helps to explain why consumers make the choices they do. For example, consumers are willing to pay more for the first few units of a good or service, but they are not willing to pay as much for additional units. This is because the first few units of the good or service give them the most satisfaction.

The law of diminishing marginal utility also helps to explain why consumers often switch to a different brand of a good or service when the price of their preferred brand increases. For example, if the price of a brand of coffee increases, consumers may switch to a different brand of coffee that is less expensive. This is because the first few cups of coffee from the preferred brand give them the most satisfaction, and the additional satisfaction that they get from each additional cup decreases.

The law of diminishing marginal utility is a fundamental concept in economics. It helps to explain how consumers make decisions about what to buy, and it can be used to predict how consumers will react to changes in prices.