In this article, I will explain the relationship between the total utility and marginal utility. It is obvious that every unit of the commodity has some utility for the consumer. We also know that consumer buys the product in units. i.e. 1st, 2nd and 3rd units and so on. When a person consumes the product continuously. The Utils he gets from the later units will be lesser than the former ones.
So, the second unit has lesser marginal utility than the first unit and so on. However, the total utility increases till it reaches the highest point (i.e. MU=0). This is the point where total utility is maximum and marginal utility is zero.
As you can see in the diagram, the units of consumption are taken on X-axis and the utility is taken on Y-axis. By plotting the points we get marginal utility curve. The marginal utility curve is downward sloping. Similarly, we plot total utility curve against units of the consumption.
From the Curve above, we can see the relationship between total utility and marginal utility.
As you can see in the table above that till the fourth unit of consumption. The marginal utility decreases but is still positive. So, when marginal utility is positive, the total utility increases. Whereas, until MU curve has not touched the horizontal axis, the total utility curve increases upward.
Marginal utility becomes Zero at the 5th unit of consumption. When marginal utility becomes zero the total utility reaches its highest. You can see this in the diagram as a dotted line.
When the marginal utility becomes negative i.e. at 6th and 7th unit of consumption, the total utility starts falling. i.e. 45 and 35.
The total utility is the sum total of all utilities one obtains from different units of a commodity.in our example, the total utility of two units of the burger is 35 (i.e. 20+15) Utils.
However, the sum total of three units of the burger is (20+15+10=45). You can calculate the total utility of other units as well.
Marginal utility is the additional utility to the total utility. As you consume an additional unit of a commodity. The Extra utility which you gain from that unit is called marginal utility.
So, you can find marginal utility. It is the total utility of N units minus TU of the next unit i.e. N-1. For example, let us calculate the marginal utility of the 4th unit.
Similarly, you can calculate the marginal utilities of other units as well.