Utility is basically classified in two parts:
But we also consider third utility for our own simplifications.
Initial Utility.
So now we shall describe all of these below.
Initial Utility -
It is the utility which is consumed from the first unit consumed by the consumer. It is always positive. For example - A consumer consumes first unit of commodity, from that he gets 10 utility. That is considered as initial utility. SO in above case initial utility is 10.
Total Utility -
It is the measure of total amount of utility consumed from the total amount of commodity consumed. Or in simple words can be said that sum of utility consumed from the commodities. For Example - First sip of milk gives 5 utility, and second gives 4 utility and third gives 2 utility. Then the total utlity can be said as 5+4+2=11
Total utility is denoted as "TU".
Marginal Utility -
It is the difference between the utility gained by consuming units. For example - consumer get 10 units from first unit of commodity while on eating second unit he gets only 5 utilities. So the marginal utility here is. 10-5=5.
It is denoted by MU.
TU = Sum of MU
Marginal utility is further classified into 3 types.
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- Total Utility
- Marginal Utility
But we also consider third utility for our own simplifications.
Initial Utility.
So now we shall describe all of these below.
It is the utility which is consumed from the first unit consumed by the consumer. It is always positive. For example - A consumer consumes first unit of commodity, from that he gets 10 utility. That is considered as initial utility. SO in above case initial utility is 10.
Total Utility -
It is the measure of total amount of utility consumed from the total amount of commodity consumed. Or in simple words can be said that sum of utility consumed from the commodities. For Example - First sip of milk gives 5 utility, and second gives 4 utility and third gives 2 utility. Then the total utlity can be said as 5+4+2=11
Total utility is denoted as "TU".
TU = Sum of Utility consumed
Marginal Utility -
It is the difference between the utility gained by consuming units. For example - consumer get 10 units from first unit of commodity while on eating second unit he gets only 5 utilities. So the marginal utility here is. 10-5=5.
It is denoted by MU.
TU = Sum of MU
Marginal utility is further classified into 3 types.
- Positive Utility - When the Amount of TU is increased on consumption of Units.
- Negative Utility - Amount of TU is decreased. Mostly happens when you ate units too much and your want decreases too much that finally it upsets you to have more of the commodity units.
- Zero Utility - When there is no change to the total utility, then that is zero utility.
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