Definition of Total utility:
The overall amount of satisfaction achieved by a consumer due to the purchase and use of a particular item or service. Consumers theoretically wish to obtain the maximum degree of total utility for the amount of money that they expend on an item or service offered by a business.
In economics, utility refers to the satisfaction gained from consuming a good or service. Total utility is usually defined as a quantifiable summation of satisfaction or happiness obtained from consuming multiple units of a particular good or service. Utility and total utility are used in economic analysis of consumer behaviors within a marketplace. Economists seek to quantify total utility using special calculations. Economists may also study several economic metrics in conjunction with total utility when seeking to understand how consumer behaviors align with supply and demand.
Total utility is the aggregate summation of satisfaction or fulfillment that a consumer receives through the consumption of goods or services.
How to use Total utility in a sentence?
- Total utility is the aggregate summation of satisfaction or fulfillment that a consumer receives through the consumption of goods or services.
- Economists seek to quantify utility and total utility using utils.
- To best understand total utility, one should understand the Law of Diminishing Marginal Utility, which states that as more of a single good or service is consumed, the additional satisfaction, referred to as marginal utility, drops.
- In general, economic theories believe that consumer actions are usually based on the goal of total utility maximization which leads to purchasing units perceived to have the greatest utility satisfaction.
- Total utility is a core concept studied when seeking to analyze consumer behaviors.
Meaning of Total utility & Total utility Definition