Final answer:
Marginal User Cost is the additional cost incurred by the consumer when consuming one additional unit of a good or service. Total Marginal Cost is the sum of the marginal cost of producing each additional unit of output. In Hotelling's model, marginal user costs tend to increase over time.
Step-by-step explanation:
Marginal User Cost: Marginal User Cost is the additional cost incurred by the consumer when consuming one additional unit of a good or service. It takes into account the opportunity cost and any additional expenses that arise from consuming more of a product.
Total Marginal Cost: Total Marginal Cost is the sum of the marginal cost of producing each additional unit of output. It represents the change in total cost resulting from producing one more unit of a good or service.
In Hotelling's model of a perfectly competitive market, marginal user costs tend to increase over time. This is because as more consumers enter the market, the competition for resources and goods increases, leading to higher prices and costs. Therefore, the marginal user cost of consuming a good or service in a Hotelling model typically rises as time goes on.