how is marginal utility found?
Marginal utility is the change in total utility divided by the change in the quantity consumed of a good.
MU=ChangeinTU/ChangeinQG
To find the marginal utility of a good, you need to know two things: the change in total utility and the change in the quantity consumed of that good. Here are the steps to calculate it:
1. Start with the initial quantity consumed and measure the total utility that you derive from it. Let's call this TU1.
2. Increase the quantity consumed by a small amount, let's say one unit, and measure the new total utility. Let's call this TU2.
3. Calculate the change in total utility by subtracting TU1 from TU2. This represents the additional utility gained from consuming one more unit of the good.
4. Next, calculate the change in the quantity consumed, which is simply the difference between the initial quantity and the increased quantity.
5. Finally, divide the change in total utility by the change in quantity consumed to find the marginal utility.
MU = Change in Total Utility / Change in Quantity Consumed
By following these steps and plugging in the appropriate values, you can determine the marginal utility of a good.