In
economics, the
marginal utility of a
good or
service is the gain from an increase, or loss from a decrease, in the
consumption of that good or service. Economists sometimes speak of a
law of diminishing marginal utility, meaning that the first
unit of consumption of a good or service yields more utility than the second and subsequent units, with a continuing reduction for greater amounts. The
marginal decision rule states that a good or service should be consumed at a quantity at which the marginal utility is equal to the
marginal cost.