Meaning & use
marginal utility
The additional satisfaction or value a person gains from consuming one more unit of a good or service.
See it in a sentence
Economists explain that the marginal utility of a second slice of pizza is usually lower than the first.
As income rises, the marginal utility of each extra dollar tends to decrease.
A note on using this word
This concept explains why demand for a good often falls as more of it is consumed, a principle known as diminishing marginal utility.
Words with a similar meaning
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