Marginal utility
Marginal utility refers to the additional satisfaction or benefit a person gains from consuming one more unit of a good or service. For example, the first slice of pizza may provide a lot of enjoyment, but the additional satisfaction from the second or third slice usually decreases. This concept helps explain consumer choices, as people tend to buy products until the pleasure from the last unit consumed equals the cost. Understanding marginal utility can help businesses make pricing decisions and individuals understand their consumption habits better.
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Marginal utility refers to the additional satisfaction or benefit that a person gains from consuming one more unit of a good or service. For example, if you're hungry and eat a slice of pizza, the first slice may bring you a lot of satisfaction. However, as you eat more, each additional slice may provide less satisfaction. This decreasing benefit is key in economics, as it influences consumer choices and demand. Essentially, marginal utility helps explain why we prioritize some purchases over others and how we make decisions about what to buy based on our needs and wants.