Critics of marginal utility analysis argue that it is unrealistic to assume that people make the mental calculus of marginal utility per dollar for large numbers of products. But when you are making a decision to either go to a first-run movie or buy a used DVD of last summerâs blockbuster, does this analysis seem so complex? Is it a reasonable representation of your thought process?

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Yuhao · Accepted Answer

Yes, this is a reasonable representation, as it is true that the marginal utility of the substance decreases over time. For example, the person I'm going to buy the DVD lost his DVD utility, as he's already watched the movie. In the condition where I will be either watching a first run movie or buying a DVD of last summer's blockbuster, my utility of first run movie would be more as, it is new and I have not watched it. While it wouldn't be high for last summer's film, as I've already watched it several times. Therefore, this concept works.

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