# What is the marginal utility?

Computes marginal utility, the change in total utility divided by the change in quantity, and marginal utility per dollar when a price is given.

- Page: https://www.acalculator.org/finance/marginal-utility-calculator
- JSON spec: https://www.acalculator.org/finance/marginal-utility-calculator.json
- Version: fc825d26831e

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| q1 | Starting quantity | Units consumed at the start. |
| u1 | Total utility at the start | The total satisfaction (utils) from the starting quantity. |
| q2 | New quantity | Units consumed after the change. |
| u2 | Total utility at the new quantity | The total satisfaction (utils) from the new quantity. |
| price | Price of one unit | The price of the good, for marginal utility per dollar. Optional. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| mu | Marginal utility | Change in total utility ÷ change in quantity: the utility of each extra unit. |
| dUtility | Change in total utility | New total utility − starting total utility. |
| dQuantity | Change in quantity | New quantity − starting quantity. |
| perDollar | Marginal utility per dollar | Marginal utility ÷ price, when a price is given. |

## Method

Marginal utility = (TU₂ − TU₁) ÷ (Q₂ − Q₁), where TU is total utility at quantity Q. Marginal utility per dollar = marginal utility ÷ price.

## Assumptions

- 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

1. q1 = 3, u1 = 63, q2 = 4, u2 = 81, price = $14.00 gives mu = 18, dUtility = 18, dQuantity = 1, perDollar = 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.
2. q1 = 1, u1 = 16, q2 = 2, u2 = 31, price = $7.00 gives mu = 15, perDollar = 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.
3. q1 = 0, u1 = 0, q2 = 1, u2 = 22, price = $14.00 gives mu = 22, perDollar = 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.
4. q1 = 2.5, u1 = 40.25, q2 = 4, u2 = 52 gives mu = 7.833333, dUtility = 11.75, dQuantity = 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.

## FAQ

### 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.

## Sources

- OpenStax, Principles of Microeconomics 3e, 6.1 Consumption Choices: marginal utility is the additional utility provided by one additional unit of consumption, MU = change in total utility ÷ change in quantity; the law of diminishing marginal utility; Table 6.2 total and marginal utility of José’s T-shirts (22, 43, 63, 81, …) and movies (16, 31, 45, …); Table 6.5 marginal utility per dollar with T-shirts at $14 and movies at $7. https://openstax.org/books/principles-microeconomics-3e/pages/6-1-consumption-choices (retrieved 2026-10-19)