Difference Between Total and Marginal Utility

The main difference between total and marginal utility is that total utility refers to the total satisfaction received by the consumer from consuming different units of a commodity while the marginal utility, connotes the additional utility derived from the consumption of the extra unit of a commodity.

The consumer demand for a product is based on the utility derived from it. From product point of view, utility refers to the power of a commodity to satisfy consumer wants. While from consumer’s point of view, it is a psychological feeling of satisfaction or pleasure, which varies from individual to individual, derived by the consumer on consumption of the good or service. Two quantitative concepts related to the utility are total utility and marginal utility.

Content: Total Utility Vs Marginal Utility

1. Comparison Chart
2. Definition
3. Key Differences
4. Relationship
5. Conclusion

Comparison Chart

Basis for Comparison	Total Utility	Marginal Utility
Meaning	Total Utility means total benefit obtained by a person from consumption of goods and services.	Marginal Utility means the amount of utility a person gains from the consumption of each successive unit of a commodity.
Result	Suffers from diminishing returns.	Declines for each additional unit consumed.

Definition of Total Utility

The overall satisfaction derived by a consumer from consumption of various units of a good or service, at a certain point or over a period, is known as total utility or alternately called as “full satiety.” In simple terms, total utility is nothing but the aggregate of all marginal utilities of the individual units consumed. In general total utility increases, with each additional unit consumed. Total Utility can be expressed as:

TU_n = U_x + U_y + U_z   or TU = ƩMU

Where TU = Total Utility
n = Number of commodities
U_x , U_y , U_z = Total respective utilities of consumption of goods
MU = Marginal Utility

Definition of Marginal Utility

The term ‘marginal’ refers to small change, and utility means satisfaction. So, as its name suggests marginal utility is the additional satisfaction received by a consumer, on the consumption of an extra unit of a commodity. It implies the addition to the total utility, due to the consumption of one more unit of a good or service. Marginal Utility is also known as “marginal satiety”. It can be expressed as:

Where, MU = Marginal Utility
∆TU_x = Change in Total Utility
∆Q_x = Change in quantity consumed by 1 unit.

Alternative way of expressing marginal utility when (n) is the number of units consumed, can be given as:

MU of nth unit = TU_n – TU_n-1

Relationship

Look at the below-given schedule and diagram, to understand three important relationships between total utility and marginal utility:

Units Consumed	Total Utility (TU)	Marginal Utility (MU)
1	30	30
2	56	26
3	76	20
4	88	12
5	90	2
6	90	0
7	86	-4
8	78	-8

• When the marginal utility is positive, total utility is increasing (from unit 1 to 5).
• When the marginal utility is zero, total utility is maximum (At 6^th unit).
• When marginal utility is negative, total utility is decreasing (Unit 7 & 8)

Conclusion

After having a detailed discussion on the two microeconomics concepts, it is clear that marginal utility is the change in the total utility received from the consumption of a successive unit of a commodity. Total Utility is the summation of utility derived from each product.