Marginal utility

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In economics, marginal utility describes the change in utility (pleasure or satisfaction resulting from the consumption) of one unit of a good or service.^[1] Marginal utility can be positive, negative, or zero.^{[citation needed]} For example, when eating pizza, the second piece may bring more satisfaction than the first, indicating positive marginal utility. However, after the third or fourth piece, the satisfaction level starts to decrease, indicating zero or even negative marginal utility.^{[citation needed]} Negative marginal utility implies that every additional unit consumed causes more harm than good, leading to a decrease in overall utility. In contrast, positive marginal utility indicated that every additional unit consumed increases overall utility.^[2]

In the context of cardinal utility, economists postulate a law of diminishing marginal utility. This law states that the first units of consumption of a good or service yields more satisfaction or utility than the subsequent units, and there is a continuing reduction in satisfaction or utility for greater amounts. As consumption increases, the additional satisfaction or utility gained from each additional unit consumed falls, a concept known as diminishing marginal utility. This idea is used by economics to determine the optimal quantity of a good or service that a consumer is willing to purchase.^[3]