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:
- 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.
- Utility has no physical existence it means it can be transferred from one person to another it can only be thinked.
- 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.
- Utility has nothing to do with usefulness. Even a harmful good has a utility example: liquor.
- Utility is different from satisfaction. Utility is a cause and satisfaction is effect.
- 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.
- 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.