Realized 1031 Glossary of Terms

Marginal Utility

Written by The Realized Team | Jun 27, 2022 12:00:00 PM

Marginal utility is a subjective concept. It deals with the additional, incremental amount of use someone is getting from a product or service. Trying to quantify an incremental use of a product is nearly impossible. The general idea behind marginal utility is that a person will continue using/consuming a product or service if the additional unit of utility provides additional gain above the product’s or service's additional unit of cost. In other words, the marginal utility is greater than the marginal cost. People will not buy or use a product or service if its marginal utility is less than its marginal cost.