When shopping at a mall, an individual can try on an item of clothing before purchasing it to make sure it fits. When shopping online, however, the individual cannot try on the item. If it does not fit, the customer will have to go to the trouble of returning it. This uncertainty about the fit lowers the anticipated marginal utility from buying online.

To address this problem, clothing retailer Land’s End added a virtual 3D model tool to its Web site. After clicking My Model in the left-hand margin of the Land’s End home page, a shopper can enter her height, weight, and various size measurements. The model on the screen automatically adjusts to a shape matching the shopper’s body. Then the shopper can see how well a particular blouse or dress is likely to fit.

Reducing uncertainty about how well clothing items will fit naturally increases an individual’s marginal utility at any given quantity she might consider consuming – and at any price. Land’s End did not leave its online prices unchanged, however. In the first year after incorporating the virtual 3D model into its site, the retailer was able to raise the average price of an item of clothing sold at its site by 13 percent without a net fall in the quantity of clothing it sold. There was an unambiguous increase in Land’s End’s revenues.

If marginal utility increases at each possible quantity consumed at a given price, then does this cause a change in demand (shift of the demand curve) or a change in quantity demanded (movement along a demand curve)?