Relationship Between Total Utility and Marginal Utility

Relationship between Total Utility and Marginal Utility :

Marginal utility derived from various units of a commodity and its total utility are interrelated. This can be easily followed from the hypothetical example given in the table.

On the basis of the Table,Total utility and Marginal Utility curves (TU and MU) can be derived with the following diagram.

TU Curve = Total Utility Curve
MU Curve = Marginal Utility Curve
X axis measures the units of the commodity consumed while Y axis indicates the figures of total and marginal utility.
Figure above shows that total utility curve slopes upwards whereas marginal utility curve slopes downwards. Marginal utility curve shows zero and negative levels of marginal utility whereas total utility curve shows maximum and constant total utility level.

1) Total utility and marginal utility of the very first unit of x consumed, are the same.

2) As the consumer consumes further  units of x, the total utility increases at a diminishing rate and marginal utility goes
on diminishing. (TU↑MU↓)

3) At a particular stage, total utility reaches to its maximum and remains constant whereas marginal utility becomes zero. This is called the point of satiety. (TU highest, MU = 0)

4) After this point, any additional unit consumed further results in a decline in the total utility, while marginal utility becomes negative. (TU↓MU negative)

5) After reaching the point of satiety, a rational consumer should stop his consumption since the maximum limit of satisfaction is reached and there is no addition to total utility by any further increase in the stock of a commodity.

6) Consumption beyond the point of satiety transforms satisfaction into dissatisfaction. In other words, a consumer starts experiencing ill effects of consumption.

Total Utility	Marginal Utility
Total utility is the sum total of the individual utilities derived from the consumption of a single unit of good.	1) Marginal utility is the addition made to the total utility from every additional unit consumed.
Total utility increases at a diminishing rate.	Marginal Utility decreases at a diminishing rate.
Total utility declines if consumption continues.	Marginal utility becomes negative if consumption continues
At the point of Satiety, TU reaches its highest or maximum	At the point of satiety, MU=0
Total utility determines value in use of a commodity.	Marginal utility determines value in exchange of a commodity.
Total Utility  can be positive.	Marginal utility can be positive, negative, zero.