Utility & Its Characteristics

MEANING OF UTILITY:

Simplest Meaning of "Utility" is "Usefulness".In economics utility is the capacity of a commodity to satisfy human needs.In the present situation,utility has been called as "Expected Satisfaction" where we will get from the simplest things which will happen in our day to day life.Sometimes Expected Satisfaction may be less or equal to or more than what we want.

Let us assume if a person is feeling Hungry.At that time he is having fruits or any junk food with him.But the way he shows interest while eating the first thing from the fruit basket is high and it keeps on decreasing for the second time because there will be less satisfaction or the interest showed by him  for the second thing decreases is called "Principle of Diminishing marginal Utility".

Suppose if a person wanted to buy a I-phone .He is going to check what are the present trending one's but he won't go for the old one(or)previous model.Here the time period of that particular  product(i.e.I-Phone) is a time constraint.Here we can observe the "Utility Diminishes Overtime".

Every person is having different tastes and different preferences for such a single product.If a person likes coffee and some other like fruit juice or any other thing.Here the tastes of consumers differs from person to person.That is the "Consumers are not identical".