Marginal utility is defined as the extra benefit that a
person gets from consuming or using an additional unit of a
good.
So what does this mean in the real world? It means
that marginal utility is supposed to be a way to measure how useful to you the
next unit of a good or service is. Here's an example.
Let's say that you have a big job interview lined up and you have no formal clothes at
all. You need a suit badly. So the marginal utility of buying a suit would be high --
you would get a lot of benefit from it. But then what if you were trying to decide
whether to buy another suit? The marginal utility would probably be lower because it
would not be as valuable to you (you don't need it as urgently) as the first
suit.
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