Marginal Utility denotes the importance of a good’s marginal use: when a unit of a homogeneous stock is lost, it is the least important previously covered use abandoned after reallocating the remaining units. Units, alternatives and other conditions must be specified.
Imagine three interchangeable containers of water assigned to drinking, cooking and watering plants, in that order of importance. If one container is lost, the remaining water can be reassigned. Watering is sacrificed even if the broken container originally held drinking water; substitution is what matters. [Menger — Principles of Economics, III.2] [Mises — Human Action, VII.1]
Equal volume does not establish the same good: drinking water and polluted water do not offer identical services. Menger discusses quality differences separately. Before applying the simple stock argument, identify which units can actually replace each other for the ends considered and whether they are available at the same time. [Menger — Principles of Economics, III.2]
With the same ranking of ends and comparable units, more urgent uses are covered before less urgent ones. An additional unit then serves a lower-ranked uncovered use. Changing needs, information or available complements changes the decision setting; it is no longer a pure comparison with one extra unit of the same stock. [Mises — Human Action, VII.1]
Some ends require a collection of complementary parts. The last missing part may unlock a possibility the earlier parts alone did not provide. Mises therefore stresses correct specification of the unit and its service; mechanically counting physical pieces must not conceal valuation of a usable whole. [Mises — Human Action, VII.1]
Another mouthful can illustrate changing sensations, but Mises’s marginal-use argument does not rest on physiological satiation. The same reasoning applies to tools or stocks for future ends. It concerns which use remains covered, not laboratory measurement of pleasure. [Mises — Human Action, VII.1]
Calling ends first, second and third does not measure distances between them. Adding these ranks yields no quantity of total satisfaction, nor can marginal valuation be multiplied by the number of units. Monetary cost calculations can help without turning a ranking of ends into a physical quantity. [Mises — Human Action, VII.1] [Mises — Human Action, XI]
Prices emerge from offers and demands interacting under specific constraints. One person’s ordering of uses reveals neither a unique market price nor the relative size of different people’s benefits. Such conclusions require further information or assumptions; the word “marginal” supplies neither. [Menger — Principles of Economics, III.2] [Mises — Human Action, XI]
Someone may decide about a BTC amount needed for payment, a reserve or exchange, rather than an abstract Satoshi without context. Fees and alternatives change feasible options. Marginal utility therefore does not imply that each additional Satoshi must carry a lower market price or that a larger stock predicts the exchange rate. [Mises — Human Action, VII.1] [Mises — Human Action, XI]
For the clearest picture, read this entry together with Subjective Value Theory, Ordinal Utility, Carl Menger, Opportunity Cost, Time Preference. The reverse links also lead from Time Preference, Subjective Value Theory, Ordinal Utility, Carl Menger.