Marginal utility
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In economics, utility is the satisfaction or benefit derived by consuming a product; thus the marginal utility of a good or service is the change in the utility from an increase in the consumption of that good or service.
In the context of cardinal utility, economists sometimes speak of a law of diminishing marginal utility, meaning that the first unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. Therefore, the fall in marginal utility as consumption increases is known as diminishing marginal utility.
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See also
- Diminishing returns
- Economic subjectivism
- Marginalism
- Microeconomics
- Paradox of value
- Rivalry (economics)
- Shadow price
- Theory of value (economics)
- Utility
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