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.

TUn = U1+U2+U3+………..+Un

Where,

TU = Total utility from n units of a given commodity

n = number of units consumed

U1, U2, U3 ………….U= utility from 1st, 2nd, 3rd to an nth 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

MUn = TUn – TUn-1

Where MU= marginal utility from an nth unit

TUn = Total utility from n units

TUn-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

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

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.

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