Difference between Total Utility and Marginal Utility

The main difference between Total Utility and Marginal Utility is that the total utility refers to the satisfaction derived by a consumer from the consumption of a certain amount of a commodity whereas Marginal Utility refers to the additional satisfaction derived by the consumer from consumption of one more unit of a commodity.

To understand its difference, first, we have to know the meaning of both terms:

Meaning of Total Utility:

Total Utility refers to the total satisfaction obtained from the consumption of all possible units of a commodity. For example, if consumption of one apple gives a person satisfaction of 10 units and consumption of another apple gives the satisfaction of 8 units, the total satisfaction from two apples will be (10+8) = 18 units. If one more apple gives him the satisfaction of 6 units, then total satisfaction becomes (10+8+6)=24 units.

TU_n = U₁+U₂+U₃+………..+U_n

Where,

TU_n  = Total utility from n units of a given commodity

n = number of units consumed

 U1, U2, U_{3 ………….}U_n = utility from 1^st, 2^nd, 3^rd to an n^th unit of commodity.

Meaning of Marginal Utility:

Marginal Utility refers to the additional utility derived from the consumption of one more unit of a given commodity in a given time period.

As in the above example, the total utility increases from 18 to 24 units after the consumption of 3rd apple. Thus, an additional 6 units are the marginal utility-driven from the 3rd unit of apple.

MU can be calculated as

MU_n = TU_n – TU_n-1

Where MU_n = marginal utility from an n^th unit

TU_n = Total utility from n units

TU_n-1 = Total utility from n-1 units

In simple words, MU is the change in total utility when more unit of a given commodity is consumed.

 Therefore,

 “MU= Change in TU/ Change in units consumed”

Chart of Difference between Total Utility and Marginal Utility

Basis of Difference	Total Utility	Marginal Utility
Meaning	It is the aggregate satisfaction derived from the consumption of a commodity by a consumer	It is the additional satisfaction derived from consuming an extra unit of a commodity by a consumer.
General tendency	In the beginning, it increases but at a decreasing rate.	It tends to diminish as more and more units of a commodity are consumed
Point of Satiety	The point of satiety arrives when it is maximum.	Point of satiety arrives where it is zero.
After Saturation	It tends to decrease after the point of saturation is reached.	It becomes negative after the point of saturation.
Calculation	It can be calculated as the summation of marginal utilities derived from all units of a commodity	It can be calculated as the difference between the total utilities derived from two successive units of a commodity.
Expression	TUn = U1+U2+U3+………..+Un	MUn = TUn – TUn-1

Download the chart: -

If you want to download the chart please download the following image and PDF file:-

 

Conclusion: -

Thus,  Total Utility and Marginal Utility are the types of term Utility. These both are used to analyze the consumers' preferences while purchasing in a market.

Thanks Please share with your friends  

Comment if you have any questions.

Check out Business Economics Books @ Amazon.in