As a person consumes more of a good or service, the person's will increase. At the same time, this person's will decrease with each additional unit.

Total utility

Marginal utility

Explanation:

Total utility is the total satisfaction derived from a particular activity. As consumption increases, total utility increases at a decreasing rate.

Marginal utility is the utility derived from one more unit of consumption. As consumption increases, the satisfaction derived falls.

For example, the marginal utility a man who is extremely thirsty would derive from the first bottle of cold water would be the highest. The utility he derives from additional bottles of water would successively decrease.

The law of diminishing marginal utility states that as consumption increases, marginal utility falls.

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