Marginal utility is the additional utility enjoyed from consuming one more unit. When our consumer increases consumption from 4 episodes to 5 her utility increases from 10 to 15, so the marginal utility of the 5th episode is 5. The slope of the TU curve between 4 and 5 units is approximately 5 as we can see to the right. Thus, the slope of the TU curve is marginal utility since the slope represents the rate of increase in utility as consumption increases.
Copyright © 1995-2004 OnLineTexts.com, Inc. - All Rights Reserved