In this article, you will discover 6 types of utility with examples. Everyone tries to fulfill/satisfy his wants with available resources. It is true that all human wants cannot be settled fully at a specific time. Utility analysis describes consumers’ behavior in relation to the maximization of satisfaction. We know that utility is a relative and subjective concept. The utility is different from pleasure, usefulness, and satisfaction.
Types of Utility
1. Form of Utility
The first type of utility is a form of utility. When utility is formed due to a change in the form or structure of a current material it is known as form utility.
Remember: Change in shape or structure.
For Example, Furniture from wood, toys made of clay, etc.
2. Place Utility:
The second type of utility is place utility. When the utility of a commodity rises due to a change in its place, it is known as place utility.
Remember: Change in place
For Example, woolen clothes have more utility in cold places than in hot places. Transport creates place utility. 2. Electricity has more utility at the night rather than day.
3. Service Utility:
Service utility arises when personal services are provided by many professionals. Service utility is made where both production and consumption take place at the same time.
Remember: Services by professionals
For Example, the services of doctors, teachers, lawyers, etc.
4. Knowledge Utility:
Another type of utility is knowledge. When a consumer gets knowledge about a particular product, it is known as knowledge utility.
Remember: Consumers acquire knowledge from products.
For example, the Utility of a mobile phone or a computer increases when a person understands its different functions.
5. Possession Utility:
Possession means ownership. Possession utility occurs when the ownership of goods is shifted from one person to another person.
Remember: Transfer of ownership
For example, 1. the transfer of goods from the sellers to the buyers. 2. buying a laptop from the seller.
6. Time Utility:
When a commodity’s utility rises with a variation in its time of utilization, it is known as time utility. Time utility is providing consumers their wanted goods or service at a time when they demand them.
Time utility is also followed when goods are stored and used at times of absence like a blood bank.
Remember: Change in time of utilization
For example, 1. a student has more utility for textbooks during examinations than on vacations. Time utility is also observed when goods are stored and used at a time of scarcity. like blood bank., 2. A company provides goods when consumers needed.
So, friends, these were the types of utility and I hope you have understood them clearly. But still, if you see any need in this post, then please give your view in the comment box and help us to improve that deficiency, thanks.