Csr by Icici

CONSUMER BEHAVIOUR
CONCEPT OF UTILITY
            Utility is a basic concept in explaining consumer behaviour. It helps in describing the way consumers choose from among different consumption possibilities. Thus, the concept of utility helps in deriving the demand curve.
Utility denotes satisfaction. It is the subjective pleasure that a person derives from consuming a good or service.
The utility analysis of consumer behaviour was first discussed by three contemporary economists – Jevons, Manager and Walrus in the early 1870s. It was, however, perfected and systematically presented by Alfred Marshall, in his celebrated book, Principles of Economics, in 1890.
CHARACTERISTICS OF UTILITY
The following characteristic features of utility provide an economic understanding of the term.
  1. Utility is a subjective term: Utility of a commodity depends on a consumer’s mental attitude and assessment regarding its power to satisfy his particular want. Thus, utility of a commodity may differ from person to person. Psychologically, every consumer has his likes and dislikes and everyone determines his own level of satisfaction.
  2. Utility is a relative term: Utility of a commodity varies in different situations in relation to time and place. Even the same consumer may derive a higher or lower utility from the same commodity at different times and different places.
  3. Utility has no moral significance: A commodity which satisfies any type of want, whether moral or immoral, socially desirable or undesirable, has utility.
  4. Utility is not necessarily equated with usefulness: Utility simply means the ability to satisfy a want. A commodity may have utility but it may not be useful to the consumer.
  5. Utility is different from pleasure: A commodity may have utility but its consumption may not give any pleasure to the consumer.
  6. Utility depends on the intensity of want: Utility is a function of intensity of want. A want which is greatly intense will...