Definitions for marginal utility
This page provides all possible meanings and translations of the word marginal utility
(economics) the amount that utility increases with an increase of one unit of an economic good or service
The additional utility to a consumer from an additional unit of an economic good.
In economics, the marginal utility of a good or service is the gain from an increase or loss from a decrease in the consumption of that good or service. Economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. The marginal decision rule states that a good or service should be consumed at a quantity at which the marginal utility is equal to the marginal cost. The concept of marginal utility played a crucial role in the marginal revolution of the late 19th century, and led to the replacement of the labor theory of value by neoclassical value theory in which the relative prices of goods and services are simultaneously determined by marginal rates of substitution in consumption and marginal rates of transformation in production, which are equal in economic equilibrium.
Find a translation for the marginal utility definition in other languages:
Select another language:
Discuss these marginal utility definitions with the community:
Word of the Day
Would you like us to send you a FREE new word definition delivered to your inbox daily?
Use the citation below to add this definition to your bibliography:
"marginal utility." Definitions.net. STANDS4 LLC, 2015. Web. 29 May 2015. <http://www.definitions.net/definition/marginal utility>.