# Marginal Utility **Marginal utility describes how much value will be gained (or lost) from an increase of consumption of a particular commodity**. Marginal utility can be negative, if consumption of the additional unit incurs more costs than benefits.[^1] [^1]: [[Marginal Utility - Wikipedia#^w440en]] ![[Subjective Theory of Value - Wikipedia#^fmpli7]] This is in direct contrast to the total utility (or potential utility) which ignores current consumption. ![[Study Guide to the Jordan Peterson – Robert Murphy Podcast#^mi98u2]] Marginal utility is central to the [[Subjective Theory of Value]], which uses marginal utility to solve the [[Diamond-Water Paradox|Diamond-Water Paradox]]. According to the [[Subjective Theory of Value]], water's total utility is rather low (whereas diamonds have a high total utility), **but for a dehydrated man in a desert who is about to die the marginal utility of water exceeds the total utility of diamonds**.[^2] [^2]: [[Marginalism - Wikipedia#^6it7th]] Another example was introduced by Robert Murphy: **When Coke is on sale you don't empty your bank account and buy all of it, because the marginal utility of Coke decreases with each can. At some point the marginal utility of Coke will even become negative, as Coke can expire, it occupies space in your fridge, you can use the money for better purposes** ([[Economic Cost]]), etc.[^3] [^3]: [[189. Is Property Theft Dr. Robert Murphy#^trzndz]]