What is the utility?

The concept of utility refers to the measure of satisfaction by which users value the choice of certain services or goods in financial terms. These services and goods have certain properties that satisfy the demands of individuals, having a positive impact on consumers.

It is a very broad term, which has multiple meanings. Another useful meaning is the benefit or interest that is achieved with the use or enjoyment of a service or good. This implies that the higher the profit, the more interest there will be in buying it.

The usefulness of a service either has a high level of subjectivity, since it can be valued differently by the consumers, attending to needs, tastes or trends. Therefore, in economic terms it is difficult to make the exact measurement of profits.

In the field of finance, the term utility is also associated with the profit that is obtained from an investment or sale. This is the case, for example, of a person who spends 200 euros buying items in bulk, and after reselling them in the retail market, he obtains 300 euros. In that case, the profit would be 100 euros. Therefore, it is used as a synonym for profit, since it would represent the difference between the expenses that a business has and the income.

In this sense, users make decisions in the mercado opting for those items that provide them with higher profits, taking into account the available resources, whether money or time.

In the field of microeconomics, this concept is shown through the utility function, which reflects upwardly how utility decreases when the consumer increases more and more the quantity of the good or service that he consumes. The maximum utility point is achieved when it is no longer consumed.

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