Index
The Demand Curve 1
The Demand Curve 2
The Demand Curve 3
The Laws of Supply and Demand - 4
The Laws of Supply and Demand - 5
A ''Contraction'' of Demand - 6
''Ceteris Paribus'' - 7
An ''Expansion'' of Demand - 8
Marginal Utility - 9
Marginal Utility - 10
Marginal Utility - 11
Marginal Utility - 12
Consumer Surplus - 13
Consumer Surplus - 14
Price Discrimination - 15
An ''Expansion'' of Supply - 16
An ''Expansion'' of Supply - 17
Market Equilibrium - 18
Market Equilibrium - 19
Market Equilibrium - 20
Movements of the Demand Curve - 21
Movements of the Demand Curve - 22
Movements of the Demand Curve - 23
Inferior Goods - 24
Movements of the Demand Curve - 25
Movements of the Supply Curve - 26
Movements of the Supply Curve - 27
Movements of the Supply Curve - 28
The Income Effect - 29
The Substitution Effect - 30
The Substitution Effect - 31
The Substitution Effect - 32
The Substitution Effect - 33
Complements - 34
Complements - 35
Review: Factors Effecting Demand - 36
Review: Factors Effecting Demand - 37
The Goals of Firms - 38
The Goals of Firms - 39
To: Elasticity

Marginal Utility - 11

Quantity of icecreams eaten Marginal Utility
per icecream		Total Utility
188
2614
3418
4220
5020

The utility or satisfaction derived from the first icecream consumed is 8 units of ''happiness'. The utility derived from the second icecream is only 6 units of ''happiness''. Total utility rises with consumption, but it does so at a decreasing rate. Thus, we can say that marginal utility decreases as consumption rises.

As a result, the demand curve must slope downwards.

By the way : the sum of all marginal utilities at a given level of consumption is also equal to the total level of utility.

Economists assume that everyone is trying to maximize their total utility. However, the satisfaction one gains from consumption is in part limited by our income, and by the prices of the goods and services we wish to buy.