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What is the difference between total utility and marginal utility?

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Question added by Samer Khatib , Economics Moderator , Bayt.com
Date Posted: 2016/10/23
Nathalie Nassar
by Nathalie Nassar , Inter in the retail department , BLOM Bank

The total utility of a product for example, wether it is ordinal or cardinal, is the whole utility procured to the consumer whereas the marginal utility is the added utility to the consumer if he or she consumes the product.

Total Utility is the satisfaction one derive from a good or service, while Marginal is the extra derived satisfaction from same service but with an extra or added service on it.

Shanka Fernando
by Shanka Fernando , Postgraduate Teaching Assistant , University College London

Consider a very simple utility function: U=3C, where U represents utility and C represents a unit of consumption (of a good). Suppose that the good for consumption in this case is a cookie. The function is telling us that we get3 units of utility (i.e. some kind of measured benefit) for each cookie we consume.Suppose I had cookies. The utility function above tells us that if I consume cookies, I get a utility level of (U=3*). This is our TOTAL utility in this case.

 

Suppose I want to know how many extra units of utility I get per cookie consumed. All we need to do is see the difference in utility between consuming a certain number of cookies (say X) and the utility from consuming an extra cookie (X+1); as an example:U(X+1)=3(X+1)=3X+3U(X) =3(X) =3XU(X+1) - U(X)=3. So, in this case, the utility I get for consuming one additional cookie is3 units of utility. This is the MARGINAL utility. 

 

We could of course make the example more difficult by making the utility function more complex, but the general principle is the same. For such cases, to find the marginal utility easily, simply partially differentiate the utility function with respect to consumption of the good of interest. 

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