Question

Explain any four types of utility

Answer 1

Utility is the capacity of a commodity to satisfy human wants. In other words, utility is the want-satisfying power of a commodity. The following are the types of utility:

1. Place Utility: When the utility of a commodity increases with a change in its place, it is called place utility. Place utility is created when goods are transferred from the place of production to the place of consumption. Transportation helps to create place utility.
   1. The utility of Alphonso mangoes increases when they are transferred from mango farms to various parts of the country.
   2. The utility of mobile phones increases when they are distributed from manufacturing plants to mobile stores.
2. Service Utility: Service utility is created when any service is provided by a person to another person or group of people. In other words, service utility arises when personal services are rendered by various professionals.
   1. A professor taking lectures in a class. 
   2. An advocate giving legal advice to his clients.
3. Time Utility: When the utility of a commodity increases with a change in its time of utilisation, it is called time utility. Time utility is also observed when goods are stored and used at the time of scarcity. Warehousing helps to create time utility.
   1. The utility of umbrellas will increase if they are made available during the rainy season.
   2. The utility of crackers will increase if they are distributed during the period of Diwali.
4. Form Utility: When utility is created due to the change in shape or form or structure of an existing material, it is called form utility. The process of manufacturing or processing creates form utility.
   1. When wood is changed to furniture, its utility increases.
   2. When tea leaves are processed to tea powder, their utility increases.

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