What concept describes the additional satisfaction gained from consuming one more unit of a good or service?

The concept that describes the additional satisfaction gained from consuming one more unit of a good or service is known as marginal utility. Marginal utility is a key principle in economics that reflects how the satisfaction or pleasure derived from consuming a good or service changes as one consumes additional units. Typically, as a person consumes more of a good, the marginal utility tends to decrease, highlighting the law of diminishing marginal utility. This principle helps economists understand consumer behavior and the value that individuals place on various goods and services.

Understanding marginal utility is crucial for decision-making processes in consumption. For instance, consumers evaluate whether to buy one more unit based on whether the utility received from that unit exceeds the price paid. This concept plays a significant role in the overall demand for goods, as it influences how much of a product consumers are willing to purchase at different price levels.