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Consumer and his Utility

Synopsis

A consumer is a person who consumes the goods and services to satisfy his/her wants.

Introduction

Every person on this earth consumes a lot of goods and services to satisfy his/her wants. The purpose behind consumption is always to get maximum satisfaction with the available resources i.e. income and given prices of the goods and services.  

Consumer and his utility - Class 11th Commerce - Microeconomics - SRC

Did your mouth watered by looking at this picture of chocolate?

Some of you will say “Yes” and some of you will say “No“.

Let’s take an example.

There are 2 friends – Radhika and Rahul. Let’s take a look at their conversation –

Radhika – I love chocolates. I can eat them anytime. 

Rahul – Good! I prefer to have chocolates occasionally. But yes, I love to eat Maggi. I can eat it daily.

Now here you can see that the same product “Chocolates” giving different satisfaction or better to say “UTILITY” to both of them. It is clear from this example that the utility of a product differs from person and person and it can never be the same. 

Now the question arises –

Who is a consumer?

A person like you and me who consumes various goods and services to satisfy his needs which is totally based on his behaviour. 

What is consumer behaviour? 

It is the way in which consumer is willing to spend his scarce income at the given prices of goods and services

Now any person spends his hard-earned money only on those goods and services which actually satisfies his wants. 

What exactly “Utility” means? 

It is the satisfaction gained by a consumer from the consumption of a commodity or better to say – “want satisfying power of a commodity“. 

There are two approaches to measure this utility which we have discussed in our other post.

Enjoy Learning!

Read More: Marginal Opportunity Cost

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