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Marginal Utility |
Also found in: Acronyms, Encyclopedia, Wikipedia, Hutchinson | 0.02 sec. |
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Marginal utility The change in total satisfaction as a result of consuming one additional unit of a specific good or service. Marginal Utility In economics, the level of satisfaction a person derives from a good or service. Marginal utility is inherently subjective and thus difficult to measure, but it is important to determining how much supply of a product the market can handle without diminishing demand. Historically, it has been thought that one can quantify the marginal utility of each unit, but some economists disagree with this. See also: Austrian school, Law of Diminishing Marginal Utility. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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| The labor theory of value doesn't take into account the well-established law of diminishing marginal utility, which states that the value to the customer declines with additional consumption of the good in question. If relative standards of well-being do indeed matter more than absolute standards above a certain minimum threshold, then the fundamental microeconomic assumption of diminishing marginal utility will have to be reexamined. |
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