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Total Utility – Mutual Relationship with Marginal Utility

Total Utility – Mutual Relationship with Marginal Utility

Definition

At a given time the overall utility derived from the consumption of all units of a commodity is called Total Utility.

According to Professor Meyors,

Total utility is the sum of marginal utilities, associated with the consumption of successive units.

Units of Bread Marginal Utility Total Utility
1 50 50 Increasing
2 40 90
3 30 120
4 20 140
5 10 150
6 0 150 Stable
7 -10 140 Decreasing
8 -20 120

t is clear from the table that consumption of one unit of bread yields utility equal to 50, While 90 utility is derived from the consumption of second unit. In this way, total 150 utility is derived from the consumption of 5 units of bread.

Mutual relationship between two type of utilities

It is dear from above table that

  1. From the consumption of each next unit of commodity, marginal utility is derived at decreasing rate and total utility increases.
  2. It increases at decreasing rate.
  3. When marginal utility is zero, it is maximum and positive
  4. Even after getting the maximum satisfaction, if consumption still continues, Negative marginal utility is derived and due to this negative marginal utility, total utility also begin to decrease.
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