Utility

 "Dear friends,Hope you are doing well!!This is my Second post related to micro-economics ,I hope it will benefit you a lot in studying .  

 TOPIC : UTILITY

UTILITY (want satisfaction power)

cardinal utility:satisfaction with can be expressed in number for eg :1,2,3

ordinal utility:satisfaction which can be expressed according to preference for eg: orange or apple

UTILS: It is unit for measuring utility/satisfaction

TOTAL UTILITY 

It is the total satisfaction derived by consuming all the units of commodity 

 TU=⅀MU

MARGINAL UTILITY

It is the rate of change in total utility buy consuming ever  additional unit of   commodity.

  MU=TUn-TUn-1

LAW OF DIMINISHING MARGINAL UTILITY

Other things held constant marginal utility derived by consuming every additional unit of a commodity must diminished.

Assumption Of DMU

 1)consumption of a commodity should be same ,shape,size.

 2)consumption of a commodity should be same size.

 3)satisfaction can be measured in cardinal utility .

 4)price of commodity could not be change.

Dear friends

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