TYPES OF UTILITY
Defination:
Utility is nothing but the ‘usefulness’ of a product or any
sevices to satisfy human wants.
Types of utility:
1.
Cardinal Utility:
It is the numerical expressions derived by the consumers
after the consumption of goods or services. Which mainly focuses on the ‘quantative’
approach, and can be analysed by the method of ‘marginal utility analysis’.
for eg:
2.
Ordinal Utility:
It is the ‘qualitative’ approach derived by the consumers
for the goods and services they consume. It is measured by comparing in terms
of ‘rank’. And can be analysed by indifference curve analysis.
for eg: Suppose a person prefers apple to banana and banana to grapes. Hence he or she can be subjectively, his/her preferences i.e., apple>banana>grapes
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