5.3 : Relationship between Total Utility and Marginal Utility

Total Utility

Total utility, or TU, is the overall utility received from the consumption of all units of a product. For example, Nicole eats the first slice of pizza. It gives her immense satisfaction. This is her TU from the first slice. She gets some satisfaction from the second slice. The sum of utilities derived from the first and second slices gives TU from two slices of pizza. TU is the cumulative satisfaction from all consumed slices.

Marginal Utility

Marginal utility, or MU, measures the additional satisfaction received from consuming one more unit of a product. When Nicole eats the second slice of pizza, the additional satisfaction she gets from eating this second slice is its MU. When Nicole eats the third slice of pizza, the additional satisfaction she gets from this slice is its MU.

Relation between Total Utility and Marginal Utility

MU is represented by the slope of the TU curve. The TU curve initially rises, reflecting the positive MU. At the point where Nicole doesn't derive satisfaction from an additional slice, the TU curve flattens, indicating a zero MU. Beyond this point, her total satisfaction decreases. From here, the TU curve declines, representing a negative MU.