UTILITY ANALYSIS AND INDIFFERENCE CURVE
UTILITY
In economics, utility refers to the total satisfaction received from consuming a product. Consumers are assumed to be rational, they always try to maximize their utility. The utility of a good or service directly influences the demand, thus it affects the price of that good or service. A consumer’s utility is impossible to measure and quantify. Still, some economists try to estimate the quantum of utility indirectly by employing various models.
Laws of Utility Analysis
The following are the laws of utility analysis:
1. Law of Diminishing Marginal Utility
2. Law if Equi–Marginal Utility
Let us discuss the laws of utility in detail.
1. Law of Diminishing Marginal Utility: The law of diminishing marginal ...
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