What is
Utility is refers to the level of satisfaction that a consumer receives by consuming a good. A rational consumer always aims to maximize his/her utility. Utility maximization theory assumes that a typical consumer is rational and makes rational choices. Moreover, since the consumer's budget is fixed, he/she cannot afford all the combination of goods that provide them the same utility.
Marginal utility is defined as the utility derived from the consumption of one more additional unit of good. It is basically the change in utility that comes when one more unit of a good is consumed. Marginal utility can be positive, negative, or zero.
Positive marginal utility indicates that total utility rises with the consumption of one more unit of the good. Negative marginal utility indicates that total utility falls with the consumption of one more unit of the good. When the marginal utility is zero, it indicates that total utility does not change with the consumption of one more unit of the good.
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