How to Calculate Marginal Utility

Marginal utility is measures the increase in satisfaction consumers gain from consuming an extra unit of a goods or services.Marginal utility is calculated by taking the difference in total utilities, and dividing by the change in quantity consumed.

Marginal Utility = (TU_f – TU_i)(Q_f – Q_i)

Where,

TU_i - Total Utility at Q_i Units

TU_f - Total Utility at Q_f Units

Q_i - No. of Units Consumed Initially

Q_f - No. of Units Consumed Finally

Utility is the satisfaction a person derives from the consumption of a good or service. Total utility is the total satisfaction received from consuming a given total quantity of a good or service, while marginal utility is the satisfaction gained from consuming an additional quantity of that item.

Example: Utility Table