What is meant by utility?
It is a measure of satisfaction an
individual gets from the consumption of the commodities. In other words, it is
a measurement of usefulness that a consumer obtains from any good. A
utility is a measure of how much one enjoys a movie, favourite food, or other
goods. It varies with the amount of desire. Utility is a term in economics that refers
to the total satisfaction received from consuming a good or service. Economic
theories based on rational choice usually assume that consumers will strive to
maximize their utility. The economic utility of a good or service is important
to understand, because it directly influences the demand, and therefore price,
of that good or service. In practice, a consumer's utility is impossible to measure
and quantify. However, some economists believe that they can indirectly
estimate what is the utility for an economic good or service by employing
various models.
It is a measure of satisfaction an individual gets from the consumption of the commodities. In other words, it is a measurement of usefulness that a consumer obtains from any good. A utility is a measure of how much one enjoys a movie, favourite food, or other goods. It varies with the amount of desire. Utility is a term in economics that refers to the total satisfaction received from consuming a good or service. Economic theories based on rational choice usually assume that consumers will strive to maximize their utility. The economic utility of a good or service is important to understand, because it directly influences the demand, and therefore price, of that good or service. In practice, a consumer's utility is impossible to measure and quantify. However, some economists believe that they can indirectly estimate what is the utility for an economic good or service by employing various models.
