Grenznutzen

Grenznutzen, or marginal utility, is the additional satisfaction or usefulness a consumer gains from consuming one more unit of a good or service, holding all other factors constant. It is a central concept in consumer choice theory and underpins many models of how individuals allocate limited income across alternatives.

A key characteristic is the law of diminishing marginal utility: as more units of a good are consumed, the incremental satisfaction from each extra unit tends to decline. For example, the first apple may provide high satisfaction, while the eleventh adds much less, all else equal. This diminishing effect helps explain why consumers diversify their purchases rather than simply increasing the quantity of one good.

In optimization tasks, individuals maximize utility subject to a budget constraint, equating the marginal utility per unit of currency across goods. When the price of a good falls, its marginal utility per price rises, typically leading to greater consumption of that good. In modern economics, utility is often treated as ordinal rather than cardinal, so Grenznutzen is interpreted as a change in the consumer’s preference ranking rather than a precise numerical increase.

Grenznutzen is contrasted with Gesamtnutzen (total utility) and extends to multi-commodity settings, risk, and expected utility. It is foundational for the law of demand, welfare economics, and various market analyses. The concept originated in the marginalist revolution of the late 19th century and remains a standard tool in German-speaking economic literature.