I was reading this answer on this website which talked about how MB = P at allocative efficiency. "Why does allocative efficiency occur when P=MC rather than MB=MC"

In this answer, it is stated that the last (i.e. marginal) consumer who buys will be the one for whom the benefit is just equal to the cost.

I'm a bit confused about the use of the world marginal. I read online that it means "one more", but isn't that different from the use of the word marginal above? And how is MB = P, isn't marginal benefit referring to many points along the curve?


1 Answer 1


Yes marginal refers to the last or one more unit or person. I don’t see there any contradiction if you have 2 people in room and third person joins it’s both the last person and one more person.

If you are looking for a precise definition then in economics the concept of margin is connected to the first derivative (instantaneous rate of change) of function at some point. For example, with utility function $U=q^2$ marginal benefit of consuming 10 units of $q$ would be $U’(10)=2(10)=20$.

Also, demand curve is an aggregate of demands of individuals who all might derive different marginal benefit of consuming the good, the point of the answer is that the marginal customer, last customer to participate in the market, will have marginal benefit of consuming good exactly equal to price (since if $MB<P$ the person would just not participate in market).

  • $\begingroup$ Thanks this really helps. Doesn't the utility function consist of of the amount of a bundle of goods produced (when I search up pictures, it has good x and y on its axis). So how is it possible to find marginal utility? $\endgroup$ Commented Dec 7, 2019 at 10:48
  • $\begingroup$ Or is this just a graph with q on x axis and utility on y? $\endgroup$ Commented Dec 7, 2019 at 10:49
  • $\begingroup$ @ChristopherUren Without seeing the graph I can’t really tell. However, you can have multiple goods in utility function then marginal utility is the partial derivative with respect to that good, and if you want general marginal utility at some bundle of goods then it would be the sum of partial derivatives evaluated at the bundle quantities $\endgroup$
    – 1muflon1
    Commented Dec 7, 2019 at 10:53

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