Case study: Suppose your father comes back home from work and you offer him a glass of juice. The first glass of juice will give him great satisfaction. The satisfaction from second glass of juice will be relatively less. With further consumption, a stage will come when he would not require any more glass of water. If he is forced to consume even one glass that would lead to disutility.

What is the utility derived from the consumption of first glass of water known as?

Initial utility

The correct answer is Option 2: Initial utility

Initial utility is the utility derived from the consumption of the first unit of a commodity. It is always positive. For example, if a consumer starts eating bread the utility he gets from first unit is called initial utility.