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Lecture 5 (Utility (Utility Function (a mathematical function which ranks…
Lecture 5
Utility
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Marginal Utility
It is the additional satisfaction a consumer gains from consuming one more unit of a good or service.
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Ordinal Utility
It is a function representing the preferences of an agent on an ordinal scale. The ordinal utility theory claims that it is only meaningful to ask which option is better than the other, but it is meaningless to ask how much better it is or how good it is.
Cardinal Utility
The Cardinal Utility approach is propounded by neo-classical economists, who believe that utility is measurable, and the customer can express his satisfaction in cardinal or quantitative numbers, such as 1,2,3, and so on.
Consumption
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Consumption is linked.
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3) Consumer Behavior is linked with price, fashion and utility standard of the product.
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Consumer Behavior
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Consumer Behavior is a science and knowledge which describes the behavior in content of utility and price.