Learn how utility functions derive demand functions and their role in maximizing consumer satisfaction and economic decision making.

Andriy Blokhin has 5+ years of professional experience in public accounting, personal investing, and as a senior auditor with Ernst & Young. Erika Rasure is globally-recognized as a leading consumer ...

A utility function measures a consumer’s preference and satisfaction with different goods or services. As part of rational choice theory, it helps economists analyze how consumers make decisions to ...

Utility is the importance that we attach to things. We make choices on the basis of this importance. Indeed, in economic terms, “utility,” “importance,” and “value” are synonyms. We choose what is ...

Utility in economics refers to the level of happiness or satisfaction of individuals. Individuals derive utility from the consumption of goods and services, and seek to maximize their utility under ...

Total utility refers to the overall level of happiness or satisfaction that a consumer experiences by consuming a certain amount of a good or service. While marginal utility measures the change in ...