How is marginal utility defined?

Marginal utility is defined as the additional satisfaction or benefit that a consumer derives from consuming one more unit of a good or service. This concept is essential in understanding consumer choice and behavior; it explains how individuals make decisions about resource allocation based on the perceived value of incremental consumption.

When a person consumes more of a product, the total utility (the overall satisfaction or happiness) increases, but the increase is not always by the same amount as previous units consumed. Marginal utility specifically measures this change in total utility that results from the consumption of an additional unit. This is important because it helps to illustrate the principle of diminishing marginal utility, which states that as a consumer continues to consume more units of a good, the additional satisfaction gained from each subsequent unit tends to decrease.

Understanding marginal utility is crucial for optimizing consumption decisions and for determining how much of a good a consumer is willing to purchase at given prices. The other options provided do not accurately capture this specific definition; they either refer to total utility or other concepts that do not focus on the additional utility derived from a single unit of consumption.