1.Definition: Utility is the satisfaction or pleasure a person derives from consuming a product or service. It’s the usefulness someone gets from a particular commodity.

2.Want-Satisfying Capacity: If a commodity satisfies a need or want, it possesses utility. For example, a thirsty person derives utility from drinking water.

3.Subjectivity: Utility is subjective, meaning it varies from person to person. For example, a chocolate lover might derive a lot of satisfaction from eating a chocolate bar, while someone who dislikes chocolate might derive little to no utility.

4.Dependence On Circumstances: The utility derived can change depending on the situation or context. A room heater, for example, will provide more utility in cold regions like Ladakh during winter, compared to in warmer regions like Chennai or during the summertime.

5.Measurement: Even though it’s a subjective concept, economists try to measure utility in hypothetical units called utils to understand and compare the satisfaction derived from different goods and services.

6.Marginal Utility: This is the satisfaction obtained from consuming an additional unit of a commodity. For instance, the first slice of pizza might provide a lot of utility, but with each additional slice, the satisfaction (utility) might decrease. This is known as the Law of Diminishing Marginal Utility.

In simple terms, utility is all about the happiness or satisfaction you get from using or consuming something, and this satisfaction can vary widely among different people or under different circumstances.

Cardinal Utility Analysis