Give reasons or explain the following
A utility is a relative concept.
Utility refers to the power of a commodity to satisfy human wants. It is a relative concept as it is related to a certain time and place. In other words, utility differs with time and place. For instance, the utility derived from cotton will be more in the summer season and the utility derived from woollen clothes will be more in the winter season. Also, the utility of woollen will be more in north areas like Shimla rather than south areas such as Tamil Nadu. Thus, a utility is said to be a relative concept.
Utility refers to the satisfaction that a consumer expects to derive from the consumption of a particular good. It is a relative concept and varies from person to person and from time to time. This is because the valuation of satisfaction from the consumption of a particular good can be different for different persons.
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- Features of Utility