Total utility (TU)
The total satisfaction received from the consumption of given quantities of a commodity by a consumer within a given time period is called total utility. In other words, total utility is the sum of all marginal utilities obtained from the consumption of different units of a commodity.For example, a consumer consumes the first unit of an orange and gets 8 utils. As he consumes the second unit of orange he gets 6 utils. Now the total utility becomes 8 + 6 = 14.
Symbolically;
TU = ∑MU
or, TU = AU x n
Where;
∑MU = Sum of Marginal Utilities
AU = Average Utilities
n = Number of Commodities
The concept of Total Utility can be made clear by the help of following schedule and diagram:
Units of orange | Total utility |
1 | 8 |
2 | 14 |
3 | 18 |
4 | 20 |
5 | 20 |
6 | 18 |
If this article has helped you, please leave a comment.