Concept and nature of utility

CONCEPT OF UTILITY

Dear friends let us first discuss the concept or meaning of utility.

Utility may be defined as the want satisfying power of a good. A commodity is demanded because of the want satisfying power of a commodity as long as good satisfy human want they set to possess.

Nature of UTILITY:

  1. Utility is the basic characteristic which is present in all goods even garbage has a utility for a person who make compost out of it derive utility from the garbage.
  2. Utility has no physical existence it means it can be transferred from one person to another it can only be thinked.
  3. Utility is subjective in nature i.e. it differs from person to person or place to place or time to time as it depends upon human want.
  4. Utility has nothing to do with usefulness. Even a harmful good has a utility example: liquor.
  5. Utility is different from satisfaction. Utility is a cause and satisfaction is effect.
  6. Utility and tastefulness: it is not necessary that the thing which has utility should be tasteful. for example a patient medicine has a utility but has no taste.
  7. Utility is relative as it changes from time to time and place to place. Example sweaters have utility in winters but not in summers

I hope you have understood the meaning and concept of utility with nature of utility.

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