marginal utility (economics) -- Britannica Online Encyclopedia - 0 views
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These economists believed that price was partly determined by a commodity’s utility—that is, the degree to which it satisfies a consumer’s needs and desires. This definition of utility, however, led to a paradox when applied to prevailing price
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Thus, the marginal utility to a buyer of a product decreases as he purchases more and more of that product, until the point is reached at which he has no need at all of additional units. The marginal utility is then zero.
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The concept of marginal utility was augmented in the 20th century by the method of analysis known as indifference analysis (see indifference curve).
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marginal utility, in economics, the additional satisfaction or benefit (utility) that a consumer derives from buying an additional unit of a commodity or service. The concept implies that the utility or benefit to a consumer of an additional unit of a product is inversely related to the number of units of that product he already owns.
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marginal utility. (2013). In Encyclopædia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/364750/marginal-utility