UTILITY

NAME
Muhammad Kamran Khan
GROUP
B-BBA
 CONTANTS

• Definition of utility.
• Approaches.
• Types of utility.
• Conclusion.
 DEFINITION
Utility is an economic term which states
the want satisfying power of a goods and
services.
 Cardinal approach
Cardinal Utility is the utility where the
satisfaction derived by consuming a
product can be expressed numerically.
APPROACHES Traditional and Neo Classical
Economist

Ordinal approach
Ordinal Utility is the utility where the
satisfaction derived by consuming a
product cannot be expressed
numerically
.Modern Economist
 1. Form 2. Place
utility utility

7.
Natural Types of 3. Time
utility Utility utility

6. 4. Service
Knowledge 5. utility
utility Possession
utility
 Form Utility
Form Utility Definition Form utility is defined as a
process that increases the value of a product to the
consumer by making changes and altering its
physical appearance.
Example
 2. PLACE UTILITY

"involves having a product where customers buy it“

• Location, location, location•
EXAMPLE:
having produces & veggies at the grocery store
 3. TIME UTILITY
Time utility is providing the consumer his desired
goods or services at the time when he requires
them.
EXAMPLE:
Target is selling Halloween candy in preparation for
October 31st
 4. SERVICE UTILITY
• Service utility is created where both
production and consumption take place at
the same time
• Example
Police ,train etc
 5. POSSESSION UTILITY

• Possession utility: "involves making it easier for a customer to

own a product "Offering credit terms, loans, etc.
EXAMPLE:
Carmax extends a 5-year loan to a customer with a $1500
down payment.
 6. KNOWLEDGE UTILITY

Knowledge utility: When a consumer acquires knowledge about

a particular product, it is called knowledge utility.
Example
utility of a mobile phone or a computer increases when a
person knows about its various functions.
 7. NATURAL UTILITY

• All free goods such as water, air,

sunshine, etc., possess natural utility.
They have the capacity to satisfy our
wants
CONCLUSION
Thank you