Meaning: -In ordinary sense, the term utility means ‘usefulness’. In economics,
utility refers to the “Want satisfying power of a commodity”. For example: -
Water has utility because it can satisfy the thirst of a person.
Definition:
-‘Utility is the quality in commodities that makes individuals want to buy
them, and the fact that individual want to buy commodity shows that they have
utility”
Defined by............. (Mrs. Joan Robinson)
following are the types of utilities.
1.
From Utility: - Form utility is created by changing the form or shape of goods.
For examples, raw steel can be used to make steel products. The steel products
provide form utility.
2.
Place utility: - Place utility is created by changing the place of utilization.
For instance, goods produced in Mumbai can be transported to Goa for
consumption. Thus, transport services can create place utility.
3.
Time Utility: -Time utility is created by changing the time of utilization. For instance, certain products can
be warehoused from the time of production to the time of consumption.
Warehousing services can create time utility.
4.
Service utility: - Service utility is created by providing service to people. For
instance, teachers can provide service utility to students and doctors to
patients, etc.
5.
Possession utility: - Possession utility is created by transferring the ownership of
goods. For instance, a seller provides possession utility to the buyer, when
the seller sells the goods to the buyer. The buyer enjoys possession utility..
6.
Knowledge Utility: - It is created
by filling the knowledge gap. For instance, advertisements can create knowledge
utility by providing information about latest products in the market.
