Classification of utilities

Utilities are classified as follows: Marginal Utility:

It is the utility derived by the consumer by consuming an additional unit at a given time.

Example

If a consumer consumes 12 chocolates, the Marginal Utility is the utility derived from the 12th unit. It is nothing but the Total Utility of 12 chocolates minus the Total Utility of 11 chocolates. Thus,
MU n = TU n – TU n-1

Where,

MUn = Marginal Utility of ‘nth’ commodity

TUn = Total Utility of n units

TUn-1= Total Utility of n-1 units

Total Utility:

It is the utility obtained by the consumer from the consumption of all the units at a given time.

Example

If a consumer consumes 12 chocolates, then the Total Utility is the sum of satisfaction of consuming all the 12 chocolates.
Total Utility: U1 + U2 + U3 + …….. + Un

Place utility:

When the goods are transferred from one place to another place their utility increases.

Example

Goods transported from the place of plenty to the place of scarce.

Time utility:

When the seller stores the goods now and releases at the time when there is a scarcity it is called as time utility.  