How to Calculate Marginal Utility (MU)
Marginal utility (MU) equals the change in total utility divided by the change in quantity consumed: MU = ΔTU ÷ ΔQ.
Full guide: The utility maximization rule, worked in a table
The Marginal Utility formula
Worked example: Marginal Utility
Total utility from pizza slices is 20, 36, 48, and 56 utils for 1 through 4 slices. The marginal utility of the third slice = (48 − 36) ÷ (3 − 2) = 12 utils, and the fourth slice adds 56 − 48 = 8 utils, so marginal utility is diminishing.
Calculator
Enter total utility before and after the extra unit to get marginal utility and whether utility is still rising.
TU₁, satisfaction at the lower quantity. In the example, 36 utils from 2 pizza slices.
TU₂, satisfaction once the extra unit is eaten. In the example, 48 utils from 3 slices.
Q₁, the starting quantity.
Q₂. When quantity rises by exactly one, MU is just the change in total utility.
Each extra unit over this range added 12 utils, so total utility is still climbing.
- Change in total utility (ΔTU)
- 12
- Change in quantity (ΔQ)
- 1
- Effect on total utility
- Total utility rising
Going from 2 to 3 units changed total satisfaction by 12 utils.
Divide by this to convert the change in total utility into utility per extra unit.
How to calculate Marginal Utility, step by step
- 1Read total utility at both quantities. Take total utility before the extra unit and total utility after it from the table.
- 2Subtract to get the change. ΔTU = TU₂ − TU₁, the extra satisfaction that the added unit provided.
- 3Divide by the change in quantity. MU = ΔTU ÷ ΔQ; when quantity rises by exactly one unit, MU is simply the change in total utility.
- 4Check the sign. A positive MU means total utility is still rising, while a negative MU means the extra unit made the consumer worse off.
Check yourself
Three AP-style questions from the EconLearn practice bank on what this page covers. Pick your answer, then open it to see the explanation.
1. A consumer eats four slices of pizza and reports the following total utilities: 1st slice = 20 utils, 2nd slice = 36 utils, 3rd slice = 46 utils, 4th slice = 50 utils. The marginal utility of the 3rd slice is:
- A. 46 utils
- B. 15.3 utils
- C. 10 utils
- D. 4 utils
Show answer
Correct answer: C. 10 utils
Marginal utility = change in total utility from one more unit. For the 3rd slice: 46 - 36 = 10 utils. A (46) is the total utility after three slices, not the marginal gain from the third one. B (15.3) comes from dividing total utility by quantity (46/3), which gives you average utility, a different concept entirely. D (4 utils) is the marginal utility of the 4th slice (50 - 46), not the 3rd.
2. The law of diminishing marginal utility helps explain which of the following?
- A. Why supply curves slope upward
- B. Why demand curves slope downward
- C. Why firms earn zero economic profit in the long run
- D. Why governments impose price floors
Show answer
Correct answer: B. Why demand curves slope downward
Each additional unit gives you less satisfaction, so you'll only buy the next unit if the price drops enough to justify that lower marginal utility. That's a downward-sloping demand curve. A is about increasing marginal costs on the production side, which is a completely different concept on a different side of the market. C is about firm entry and exit in competitive markets, which has nothing to do with how individual consumers value successive units of a good.
3. A consumer's marginal utility from the 5th unit of a good is zero. What does this imply?
- A. Total utility from this good is at its maximum, the same at 5 units as at 4
- B. The consumer should buy exactly 5 units
- C. The consumer's total utility is zero
- D. The consumer has reached their budget constraint
Show answer
Correct answer: A. Total utility from this good is at its maximum, the same at 5 units as at 4
If the 5th unit adds zero satisfaction, total utility is the same at 5 units as at 4, so it has reached its peak. With diminishing marginal utility, a 6th unit would actually reduce total utility (negative marginal utility). C confuses marginal with total; total utility is the sum of the marginal utilities of units 1 through 4 (the 5th adds zero), which is definitely positive. B is wrong because the 5th unit contributes nothing, so unless it's free there's no reason to buy it. D is wrong because marginal utility says nothing about income or prices, so it cannot tell you whether the budget is used up.
Marginal Utility questions
How do you calculate MU?
Subtract total utility before the extra unit from total utility after it, then divide by the change in quantity: MU = ΔTU ÷ ΔQ. When quantity rises by one unit, MU is simply the change in total utility. If total utility goes from 36 utils at 2 slices of pizza to 48 utils at 3 slices, the third slice has an MU of 12 utils.
What is the law of diminishing marginal utility?
Each additional unit of a good adds less extra satisfaction than the unit before it, so marginal utility falls as consumption rises. That falling MU is one reason demand curves slope downward.
Can marginal utility be negative?
Yes, marginal utility turns negative when an extra unit lowers total utility, like one slice of pizza too many. Total utility peaks at the quantity where MU reaches zero.
What is the difference between total and marginal utility?
Total utility is the whole amount of satisfaction from all units consumed, while marginal utility is the change in total utility from one more unit. Marginal utility is the slope of the total utility curve.
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