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Published by jeegar_bhattt
concept of utility in economics
concept of utility in economics

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Published by: jeegar_bhattt on Sep 29, 2010
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Want-satisfying capacity of anygood is called utility.
Some important characteristics of utility
 – Utility and usefulness are different – Consumption may not give pleasure – Utility is not inherent property of any good – Utility has no legal or moral implication – Utility and satisfaction are not synonyms – Utility is subjective
Types of Utility
 – Form Utility- Place Utility – Time Utility- Service Utility
Diminishing Marginal Utility
Total and Marginal Utility
Marginal Utility refers to addition to total utilitiesconsequent upon the consumption of one moreunit of the same commodity at that moment of time.It signifies the addition made to total utilities bythe addition of one more unit of the samecommodity.Total utilities on the other hand signify the sumtotal of all the marginal utilities that a consumer may have derived from different but successiveunits of the same commodity at the same time.
Table Showing Difference BetweenTotal and Marginal Utility
 Number of UnitsTotal Utility(in units)MarginalUtility (inunits)1151522611334843845380635-3
Total Utility
= Addition of marginalutilities at every successive stage
Marginal Utility
= Utility obtainedseparately from every successive unitor addition made to the total utility bythe addition of one more unit of thesame commodity at the same time and place.

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