Marginal utility

Marginal utility, in <a href="/facts/Mainstream_economics/TF7cnxsE">mainstream economics</a>, describes the change in <a href="/facts/Utility/wlMDG74L">utility</a> (pleasure or satisfaction resulting from the consumption) of one unit of a good or service. Marginal utility can be positive, negative, or zero. Negative marginal utility implies that every consumed additional unit of a commodity causes more harm than good, leading to a decrease in overall utility. In contrast, positive marginal utility indicates that every additional unit consumed increases overall utility.
In the context of <a href="/facts/Cardinal_utility/5jeuW4Iw">cardinal utility</a>, liberal economists postulate a law of diminishing marginal utility. This law states that the first unit of consumption of a good or service yields more satisfaction or utility than the subsequent units, and there is a continuing reduction in satisfaction or utility for greater amounts. As consumption increases, the additional satisfaction or utility gained from each additional unit consumed falls, a concept known as diminishing marginal utility. This idea is used by economics to determine the optimal quantity of a good or service that a consumer is willing to purchase.

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Marginal utility