_____________ is the addition to total utility by the consumption of one additional unit of the commodity?a)Average utilityb)Ordinal utilityc)Marginal utilityd)Total utilityCorrect answer is 'C'. Can you explain this answer?

Question

Answer

The Marginal Utility refers to the additional benefit (utility) a consumer derives from the consumption of one additional unit of good or service.

In other words, marginal utility is the addition to the total utility resulting from the consumption of one additional unit of the commodity. Thus, it can be measured as the change in the total utility obtained from the consumption of an additional unit.

Answer

Marginal utility is the right answer. In economics marginal means one more or less unit added or subtracted in production or anything else.

Answer

C

Answer

The correct answer is C) Marginal utility.

Explanation:
- Marginal utility refers to the additional utility or satisfaction that a consumer derives from consuming one additional unit of a commodity.
- It is the change in total utility that occurs when consumption of a commodity increases by one unit.
- Marginal utility is an important concept in economics, particularly in the theory of consumer behavior and the determination of demand.
- It helps in understanding how consumers make decisions about their consumption and how they allocate their limited resources.
- The principle of diminishing marginal utility states that as a consumer consumes more and more units of a commodity, the additional utility derived from each additional unit decreases.
- This means that the marginal utility of a commodity generally diminishes as the quantity consumed increases.

Example:
- Let's say a person is consuming slices of pizza. The total utility is the overall satisfaction the person derives from consuming all the slices of pizza.
- The marginal utility is the additional satisfaction the person gets from consuming one more slice of pizza.
- Initially, the person may derive high marginal utility from the first few slices of pizza, as they satisfy their hunger and enjoy the taste.
- However, as they consume more and more slices, the additional satisfaction they get from each additional slice decreases. The marginal utility starts to diminish.
- Eventually, after consuming a certain number of slices, the person may reach a point where the marginal utility becomes negative, meaning that each additional slice actually reduces their overall satisfaction.

Importance of Marginal Utility:
- Understanding the concept of marginal utility is crucial for economists and businesses to analyze consumer behavior and make informed decisions.
- It helps in determining the optimal level of consumption and the quantity of a commodity that consumers are willing to buy at different prices.
- Marginal utility also plays a role in pricing strategies, as businesses need to consider the additional satisfaction consumers derive from each unit of a product when setting prices.
- Additionally, it helps explain why consumers are willing to pay more for the first unit of a commodity compared to subsequent units, as the marginal utility diminishes.

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