Marginal utility, Managerial Economics

Assignment Help:

Marginal Utility

The extra utility derived from the consumption of one more unit of a good, the consumption of all other goods remaining unchanged.

The hypothesis of diminishing marginal utility

This states that as the quantity of a good consumed by an individual increases, the marginal utility of the good will eventually decrease.

  Units of                                   Total Utility/                                       Marginal Utility/

X consumed                             mm TU (utils)                                       MU (utils)

          0                                   0                                                         0

          1                                   15                                                        15

          2                                   25                                                        10

          3                                   33                                                         8

          4                                   38                                                         5

          5                                    40                                                        2

          6                                    40                                                        0

          7                                     39                                                       -1

Consuming 1 unit of X gives 15 utils of satisfaction, consuming 2 units gives 25 utils, and so on.  The figure of marginal utility decline as each successive unit is consumed.  If the consumer goes on consuming more and more units, eventually he reaches a point (the sixth unit) where additional units yields no extra satisfaction at all.


Related Discussions:- Marginal utility

Morris model, explain critically growth maximisation model of morris ?

explain critically growth maximisation model of morris ?

Economic theory, How does economic theory contribute to managerial decision...

How does economic theory contribute to managerial decisions?

Marris modal, plz help tomorrow is my paper n I need help to understand thi...

plz help tomorrow is my paper n I need help to understand this topic

Determine the income effect of law of demand, Determine the Income Effect o...

Determine the Income Effect of law of demand As a result of fall in the price of a commodity, real income of its consumer increase at least in terms of this commodity. Or we c

Time factor for determinants of demand, Q. Time Factor for Determinants of ...

Q. Time Factor for Determinants of Demand? Price-elasticity of demand depends moreover on the time that consumers take to adjust to a new price: longer the time taken, greater

Stable and unstable equilibrium, Stable and Unstable Equilibrium An eq...

Stable and Unstable Equilibrium An equilibrium is said to be stable equilibrium when economic forces tend to push the market towards it.  In other words, any divergence from t

Price wars, on the application of any of the concepts learnt in Managerial ...

on the application of any of the concepts learnt in Managerial Economics. You may try to use these concepts to everyday problems in life or in any of the current debates on in the

Estimate the demand function, You're standing at three light switches at th...

You're standing at three light switches at the bottom of stairs to the attic. Each one corresponds to one of three lights in the attic, but you cannot see the lights from where you

Calculate the percentage of the disk space that must be free, Free disk spa...

Free disk space can be kept track of using a free list or a bit map. Disk addresses require D bits. For a disk with B blocks, F of which are free, state the condition under which t

Long run equilibrium of a firm under perfect competition, In the long run, ...

In the long run, because of the assumption of free entry and exit of the firms, it's not possible for the firms to make super-normal profits nor it is possible for them to incur lo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd