Learn how utility functions derive demand functions and their role in maximizing consumer satisfaction and economic decision making.

A utility function measures a consumer’s preference and satisfaction with different goods or services. As part of rational choice theory, it helps economists analyze how consumers make decisions to ...

The law of marginal utility states that customer satisfaction decreases with each unit purchased. So, the more your customers purchase, the less satisfaction they get from each additional purchase. If ...

Understand the key differences between marginal utility and marginal benefit—how they affect pricing, consumer behavior, and decision making in economics.