UTILITY

Utility is a basic concept involved in the

analysis of demand or consumer behaviour.
Economists say that a consumer derives
utility from a commodity. It refers to the
quality of the commodity to satisfy his want.
Def:- Utility means the want-satisfying
power or capacity of a commodity.
Mean:- A consumer constitutes his demand
for a commodity on the basis of utility
derived from the commodity.
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Characteristics of Utility:-
1.Utility is a subjective term
2.Utility is a relative term
3.Utility has no ethical or moral significance
4.Utility is not necessarily equated with
usefulness
5.Utility is different from pleasure
6.Utility depends on the intensity of want.
7.Utility cannot be objectively measured
8.Utility is also distinct from satisfaction
9.Utility varies in different situations
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TYPES OF UTILITY
1.Form :- Utility created by changing the
form or shape of materials. Eg. Cabinet
turned out from steel or wood.
2.Place:- Place utility is created by
transporting goods from one place to
another. Place utility of a commodity is
always more in an area of scarcity than in an
area of abundance eg. Kashmir apples fetch
higher prices in Mumbai than in Srinagar.
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TYPES OF UTILITY
3.Time :- Hoarding, storing and preserving
certain goods over a period of time may lead
to the creation of time utility for such goods,
e.g by hoarding or storing food grains at the
time of a bumper harvest and releasing their
stocks for sale at the time of scarcity, traders
derive the advantage of time utility and
hereby fetch higher prices for food grains.
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TYPES OF UTILITY
4.Service:- Service utility is created in
rending personal services to the customers
by various professionals, such as lawyers,
doctors, teachers, bankers, actors, etc.