In general economics, Utility refers to the overall satisfaction a consumer gets from consuming a good or service. It’s a theoretical concept used to understand consumer behavior and decision-making. The concept of utility is about understanding preferences:
- Making Choices: Consumers are assumed to make choices that maximize their overall utility.
- Law of Diminishing Marginal Utility: This principle suggests that the additional satisfaction gained from consuming each additional unit of a good or service decreases.
The term “Utility Value” is a theoretical concept about consumer satisfaction.