What does marginal utility refer to?

Marginal utility refers specifically to the change in utility that a consumer experiences from consuming an additional unit of a good or service. This concept is pivotal in understanding consumer choice and behavior in microeconomics because it addresses how the satisfaction or utility derived from a product evolves with each additional unit consumed.

When consumers make decisions, they weigh the additional satisfaction gained from consuming more of a good against the cost of that good. If the marginal utility gained from an additional unit exceeds its cost, the consumer is likely to purchase that additional unit. This principle illustrates the diminishing returns that often occur in consumption; as more units of a good are consumed, the additional satisfaction (marginal utility) typically decreases.

In this context, the other options do not define marginal utility accurately. The first option refers to total utility, which is the cumulative satisfaction from all units consumed rather than the additional satisfaction from one more unit. The third option also describes total utility rather than marginal utility. The fourth option addresses maximum satisfaction, which could imply a peak point of utility rather than the specific additional satisfaction derived from one extra unit of a product. Thus, the most precise definition of marginal utility is indeed the change in utility from consuming an additional unit.