Total Utility
What is Total Utility?
Total utility is the overall satisfaction a consumer receives from consuming a given quantity of a good.
It rises as long as marginal utility is positive and is maximized when marginal utility equals zero. Total utility equals the sum of the marginal utilities of all units consumed. Beyond the satiation point it falls.
Total Utility: a worked example
A coffee drinker reports marginal utility of 30, 22, 14, 6, and negative 4 utils for the first through fifth cup of a day. Add them in sequence to build total utility: 30, then 30 + 22 = 52, then 52 + 14 = 66, then 66 + 6 = 72, then 72 minus 4 = 68. Total utility peaks at 72 utils with the fourth cup, the last cup whose marginal utility is still positive. The fifth cup leaves the drinker jittery, so its marginal utility is negative and total utility slides back to 68. Stopping at four cups only makes sense if coffee is free. At $2 a cup, the third cup delivers 14 ÷ 2 = 7 utils per dollar and the fourth delivers 6 ÷ 2 = 3 utils per dollar, so a drinker who can buy more than 3 utils per dollar elsewhere stops at three.
The mistake students make with total utility
Maximizing total utility gets mistaken for the consumer's actual goal, so students say the buyer should keep consuming until marginal utility hits zero. That rule holds only when the good costs nothing. At a positive price, every extra unit spends dollars that could have bought satisfaction elsewhere, so the buyer stops where marginal utility per dollar is equal across all goods and the budget is exhausted. Consuming to a marginal utility of zero on a priced good means overspending on it and surrendering more utility somewhere else.
Total Utility questions
How do you calculate total utility from marginal utility?
Add the marginal utilities of every unit consumed so far. If the first three units deliver 30, 22, and 14 utils, total utility after three units is 30 plus 22 plus 14, which equals 66 utils. Running the arithmetic backward works too, since subtracting consecutive total utility figures recovers the marginal utility of each unit. Utility tables on exams often hand you one column and expect you to fill in the other.
At what quantity is total utility maximized?
Total utility reaches its highest point at the last unit with positive marginal utility, which is where the marginal utility curve crosses zero. Consuming past that point makes marginal utility negative and drags total utility back down. On a graph the total utility curve flattens out at its peak exactly where marginal utility meets the horizontal axis, a relationship exam questions like to test in both directions.
Is total utility the same as consumer surplus?
Total utility measures the full satisfaction from consuming a quantity, expressed in utils. Consumer surplus measures benefit in dollars, calculated as what buyers were willing to pay minus what they actually paid. A consumer can enjoy large total utility from a good and still capture little surplus if the price sits close to the maximum they would pay. Total utility ignores price entirely, while consumer surplus depends on it directly.
Formula / Example
Related terms
Common comparisons
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