marginal utility

Noun

Meaning

(economics) the amount that utility increases with an increase of one unit of an economic good or service

Synonyms

Hypernyms

Examples

It dispensed with the labour theory of value of which Smith was most famously identified with in classical economics, in favour of a marginal utility theory of value on the demand side and a more general theory of costs on the supply side. Source: Internet

Because the marginal rate of substitution of leisure for income is also the ratio of the marginal utility of leisure (MU L ) to the marginal utility of income (MU Y ), one can conclude: : where Y is total income and the right side is the wage rate. Source: Internet

Böhm-Bawerk also argued that the law of marginal utility necessarily implies the classical law of costs. Source: Internet

Consumers equalize the marginal utility (amount of satisfaction) of the last dollar spent on each good. Source: Internet

For the consumer, that point comes where marginal utility of a good, net of price, reaches zero, leaving no net gain from further consumption increases. Source: Internet

He believed that prices of goods and services are proportional to marginal utility rather than to labor amounts in free market. Source: Internet

Close letter words and terms