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Marginal utility
In this guide
The increase in total utility of consumption of agood which results from increasing the quantity of the good consumed by one unit. This concept played an extremely important part in Marshallian demand theory, but has been less important since the introduction of indifference analysis. It is important to appreciate the distinction between marginal and total utility. A good may have a very low marginal utility, but a very high total utility, e.g. water; and since it is the marginal utility which (in conjunction with supply) determines price, this explains the old paradox of value of why goods which are essen ti al for life, i.e. have high total utility, seil at low prices, whereas inessential goods, such as diamonds, seil at a high price.
Reference: The Penguin Dictionary of Economics, 3rd edt.
