Economic Utility
| Economic utility is the satisfaction or happiness that a consumer derives from the consumption of a good or service. It is often measured by the amount of money that the consumer is willing to pay for the good or service. Utility can be divided into four types: 1. Form utility is the utility that a consumer derives from the physical form of the good or service. For example, a consumer may prefer a can of soda over a bottle of soda because it is easier to carry. 2. Place utility is the utility that a consumer derives from the location of the good or service. For example, a consumer may prefer to buy a good or service from a store that is close to their home. 3. Time utility is the utility that a consumer derives from the time at which the good or service is available. For example, a consumer may prefer to buy a good or service that is available immediately. 4. Possession utility is the utility that a consumer derives from owning the good or service. For example, a consumer may prefer to own a good or service because it gives them a sense of security. |
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