Basic Concepts of Economics — Economics STD 9 — Question
ICSE BoardEnglish MediumSTD 9EconomicsBasic Concepts of Economics2 Marks
Question
Explain the concept of marginal utility with the help of an example.
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Answer
Marginal Utility : Marginal utility refers to the net addition made to the total utility by consuming one more unit (additional unit) of a commodity. If total utility derived from the consumption of n units of a commodity is denoted by TU and total utility derived from the consumption of $n +1$ units is $TU _{ n +1}$ then $mu = TU _{ n +1}- TU _{ n }$ The concept of marginal utility can be explained with the help of an example. When a consumer consumes one roti, he gets total utility equal to 10 utils. By consuming second roti total utility becomes 18 utils i.e. $10+8$. Therefore marginal utility of the second roti is 8 , i.e. $8=18-10$.
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