What is the marginal utility?
Enter the total utility at a starting quantity and at a new quantity. The marginal utility calculator divides the change in total utility by the change in quantity. Add the price to get marginal utility per dollar, the number used to compare goods.
- Marginal utility
- 18
From a quantity of 3 to 4, total utility changes by 18: a marginal utility of 18 per unit.
- Change in total utility
- 18
- Change in quantity
- 1
- Marginal utility per dollar
- 1.2857
Marginal utility: 18. From a quantity of 3 to 4, total utility changes by 18: a marginal utility of 18 per unit.
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes marginal utility, the change in total utility divided by the change in quantity, and marginal utility per dollar when a price is given.
Example with the default inputs (Starting quantity 3, Total utility at the start 63, New quantity 4, Total utility at the new quantity 81, Price of one unit $14.00): From a quantity of 3 to 4, total utility changes by 18: a marginal utility of 18 per unit.
Method: Marginal utility = (TU₂ − TU₁) ÷ (Q₂ − Q₁), where TU is total utility at quantity Q. Marginal utility per dollar = marginal utility ÷ price.
- Total utility is measured in utils, a made-up unit of satisfaction; only the differences matter.
- Over more than one unit, the result is the average marginal utility of each extra unit in that range.
- Arithmetic is exact on the typed decimals; marginal utility shows up to 6 decimals (6 significant figures below 0.0001 in size) and per dollar up to 4.
Worked examples
Each example is checked against the calculator on every build.
- Starting quantity 3, Total utility at the start 63, New quantity 4, Total utility at the new quantity 81, Price of one unit $14.00 gives Marginal utility 18, Change in total utility 18, Change in quantity 1, Marginal utility per dollar 1.2857.Source: OpenStax, Principles of Microeconomics 3e, 6.1 Consumption Choices (MU = change in total utility ÷ change in quantity; Table 6.2: José’s T-shirts give total utility 22, 43, 63, 81 for 1 to 4 shirts and movies 16, 31, 45 for 1 to 3; Table 6.5: marginal utility per dollar at $14 a T-shirt and $7 a movie). https://openstax.org/books/principles-microeconomics-3e/pages/6-1-consumption-choices: 81 − 63 = 18
- Starting quantity 1, Total utility at the start 16, New quantity 2, Total utility at the new quantity 31, Price of one unit $7.00 gives Marginal utility 15, Marginal utility per dollar 2.1429.Source: OpenStax, Principles of Microeconomics 3e, 6.1 Consumption Choices (MU = change in total utility ÷ change in quantity; Table 6.2: José’s T-shirts give total utility 22, 43, 63, 81 for 1 to 4 shirts and movies 16, 31, 45 for 1 to 3; Table 6.5: marginal utility per dollar at $14 a T-shirt and $7 a movie). https://openstax.org/books/principles-microeconomics-3e/pages/6-1-consumption-choices: 31 − 16 = 15
- Starting quantity 0, Total utility at the start 0, New quantity 1, Total utility at the new quantity 22, Price of one unit $14.00 gives Marginal utility 22, Marginal utility per dollar 1.5714.Source: OpenStax, Principles of Microeconomics 3e, 6.1 Consumption Choices (MU = change in total utility ÷ change in quantity; Table 6.2: José’s T-shirts give total utility 22, 43, 63, 81 for 1 to 4 shirts and movies 16, 31, 45 for 1 to 3; Table 6.5: marginal utility per dollar at $14 a T-shirt and $7 a movie). https://openstax.org/books/principles-microeconomics-3e/pages/6-1-consumption-choices: 22 − 0 = 22
- Starting quantity 2.5, Total utility at the start 40.25, New quantity 4, Total utility at the new quantity 52 gives Marginal utility 7.833333, Change in total utility 11.75, Change in quantity 1.5.Source: OpenStax, Principles of Microeconomics 3e, 6.1 Consumption Choices (MU = change in total utility ÷ change in quantity; Table 6.2: José’s T-shirts give total utility 22, 43, 63, 81 for 1 to 4 shirts and movies 16, 31, 45 for 1 to 3; Table 6.5: marginal utility per dollar at $14 a T-shirt and $7 a movie). https://openstax.org/books/principles-microeconomics-3e/pages/6-1-consumption-choices
How it works
- Change in total utility = TU₂ − TU₁
- Change in quantity = Q₂ − Q₁
- Marginal utility = (TU₂ − TU₁) ÷ (Q₂ − Q₁)
- Marginal utility per dollar = marginal utility ÷ price, shown when you give a price
Rules:
- Quantities are 0 or more. Total utilities may be negative. Each is at most 1 quadrillion in size. The price, when given, must be more than $0.
- The two quantities must differ; otherwise there is no answer.
- A result too large to show as a number gives no answer. So does a result that is not 0 but too small to show as a number.
- The arithmetic is exact on the decimals you type. Marginal utility shows up to 6 decimals (6 significant figures below 0.0001 in size) and marginal utility per dollar up to 4, rounded half away from 0.
Assumptions
- Both total utilities are for the same person and the same good, in the same unit (utils).
- Over a change of more than one unit, the result is the average marginal utility of each extra unit in that range.
Worked examples by hand
José's fourth T-shirt at $14. MU = (81 − 63) ÷ (4 − 3) = 18 utils. Per dollar: 18 ÷ 14 = 1.2857…, shown as 1.2857 (OpenStax rounds to 1.3).
His second movie at $7. MU = (31 − 16) ÷ 1 = 15. Per dollar: 15 ÷ 7 = 2.1429.
The first T-shirt. From 0 to 1 shirt: MU = 22 − 0 = 22; per dollar 22 ÷ 14 = 1.5714.
Decimals, no price. From 2.5 to 4 units, total utility goes from 40.25 to 52: MU = 11.75 ÷ 1.5 = 7.8333…, shown as 7.833333.
Other questions people ask
What is marginal utility?
Marginal utility is the extra satisfaction from consuming one more unit of a good. Economists measure satisfaction in utils, a made-up unit; what matters is how utility changes, not its level.
How do I calculate marginal utility?
Subtract the total utility before from the total utility after, and divide by the change in quantity. José gets 63 utils from 3 T-shirts and 81 from 4, so the fourth T-shirt adds (81 − 63) ÷ (4 − 3) = 18 utils.
What is the law of diminishing marginal utility?
Each extra unit of a good usually adds less satisfaction than the one before. José’s T-shirts add 22, 21, 20 and then 18 utils: total utility keeps rising, but more slowly.
What is marginal utility per dollar?
Marginal utility divided by the price. It shows how much satisfaction the last dollar spent on a good buys. José’s fourth T-shirt adds 18 utils at $14, or 1.29 utils per dollar; his second movie adds 15 utils at $7, or 2.14 per dollar.
How does marginal utility per dollar guide spending?
A consumer gets the most total utility from a budget by spending each next dollar where it buys the most utility, until the marginal utility per dollar is equal across goods.
Can marginal utility be negative?
Yes. Past some point one more unit makes you worse off, such as one slice of pizza too many, so total utility falls and marginal utility is below zero.