Theme: Utility

Theme: Utility

By Mironshoh

What Is Utility?

• In economics, utility is a term used to determine the worth or value of a good or service. More specifically, utility is the total satisfaction or benefit derived 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 usually impossible to measure or quantify. However, some economists believe that they can indirectly estimate what is the utility of an economic good or service by employing various models.

What kind of utility?

• There are many types of services.For example ,economic services, electricity services , social services. If we take economic sevices as an example ,there are different types of them.
• Economic utility can be defined as the total amount of satisfaction that someone experiences when they consume a particular product or service. It helps measure how much fulfillment someone requires in order to satisfy a particular need or want.

What Are the Main Types of Economic Utility?

• What Are the Main Types of Economic Utility?
• There are four main types of economic utility. The first is form utility, which means the amount of value someone receives from goods or services that they actually need.
• Time utility has to do with the amount of time it takes for companies to respond to the needs and demands of their consumer bases.
• The third utility has to do with place, which refers to a centralized location where consumers can easily access the products and services they need.
• Possession utility is the final type of economic utility. It measures a product or service's perceived value based on a consumer's ability to obtain and use it as soon as the need or want arises.

Based on the customer’s requirement or need, the product is assigned its utility. Utility depends on consumer demand. A buyer purchases a particular product when he believes his want can be fulfilled by the consumption or use of that specific product. 

• Based on the customer’s requirement or need, the product is assigned its utility. Utility depends on consumer demand. A buyer purchases a particular product when he believes his want can be fulfilled by the consumption or use of that specific product.