What is Total Utility?
Total utility is the complete satisfaction a consumer gains from using a certain good or service. It's often compared to marginal utility, the extra satisfaction from using an additional unit of a good or service. Total utility aids in examining the demand for goods and services.
Understanding Total Utility
Total utility is the total satisfaction derived from consuming a specific good or service. Marginal utility, another type of utility, refers to the additional satisfaction from consuming an extra unit of a good or service.
Total utility gauges the happiness consumers get from using various products or services. Economists use specific methods to calculate a product or service's total utility. It is tied to consumer behavior in a marketplace.
Total utility impacts the market supply and demand for products/services. Economists study supply and demand patterns by examining the total utility of products/services.
Economists also study how small changes in consumption affect consumer behavior. For total utility, these small changes indicate fluctuating satisfaction levels from consuming more or less.
Total utility and marginal utility are often compared as different measures of consumption satisfaction. Total utility is the cumulative sum of all marginal utilities until the last unit is consumed.