Discuss the Impacts of Marginal Utility (Essay Sample)
Please read each discussion response and respond to it. I have included the topic. Please keep them separate. Tell
What improvement would you suggest to help make the other students' methods for increasing marginal utility more accurate or efficient?
How else could the students increase marginal utility and therefore the consumer demand curve?
Use any personal experience, if appropriate, to help support or debate other students' posts. If differences of opinion occur, debate the issues professionally and provide examples to support your opinions.
Topic: Discuss the impacts of marginal utility.
Imagine that you are a seller of sunglasses:
How can you increase the consumer demand curve by helping increase the marginal utility for consumers?
Detail specific steps to take and provide examples.
Response 1:
Consumers strive to obtain the most total utility possible in order to maximize their total utility. The price of a good or service reflects opportunity cost, the cost of giving up other opportunities in order to enjoy this one. Here's an example: I have a choice between spending money to buy a new car or a used car. If given the opportunity to buy a used car I give up the opportunity to spend my money on a new car. At a given price, coMeasuring utility is based solely on the preferences of the individual and has nothing to do with the price of the consumers will purchase a unit of a good or service if the utility they derive from consumption of that unit is greater than the utility they could have achieved from any alternative consumption opportunity.
Response 2:
Marginal Utility examines the increase in satisfaction consumer’s gain from consuming an extra unit of good. You can increase the marginal utility for consumers by making the marginal utility per dollar equal for all goods. If a consumer can buy more of one good without buying less of another good, utility can be increased. For example if a bottle of soda was $1 and bread was $2 the bread is twice as expensive, so the consumer would choose a quantity of bread where the marginal utility of bread was twice the marginal utility of soda. Therefore the consumer would buy less bread to make sure the marginal utility of bread justify its higher price.
Discussion 10 Responses
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Marginal utility refers to the additional satisfaction a consumer gains from consuming an extra unit of good or service. One of the easiest ways of measuring utility is through giving utility a monetary value by equating it to the price relative to the commodity. With this method, it becomes easier to measure the utility a customer gets from consuming a particular good or service and subsequently the marginal utility.
Response 1
Bearing this in mind, in the first response, the argument put across is valid and true. Given two commodities at the same price, the utility is purely based on the customer’s preferences and tastes. However, this is more clearly brought out by comparing two commodities at the same price. A good example is, say, the price of soda and fresh juice is the same. In this case, the utility derived from consuming a unit of either commodity is purely based on the customer’s preference. However, this is only valid if the utility of consuming the unit commodity is greater than that obtained from consuming the alternative commodity. In this case, there is little that can be done to increase marginal utility as it is based on the customer’s prefe...
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