Utility vary's according to time & place

eg Wollen clothes have greater utility in the winter & sand has greater utility at construction site rather than at the sea-shore

Utility is a pshychological concept & differs from person to person

It depends on likes & dislikes nature habits & profession eg stethoscope has utility for DR but not a layman

Utility is a morally colourless concept

eg knife has utility to cut friuts & vegetables but can also be use to harm someone

eg milk has utility & usefullnes bcoz it is a comodity which satisfy human wants

Where as alcohol has utility to an addict but has no usefullness

A comodity may posses utility but may not give any pleasure to consumer

eg injection for patient has utility but does not give enjoyment or pleasure to him

Eg Utility is cause of consumption

Eg a thirsty person drinks glass of water since water has capacity to satisfy thirst. Upon drinking water the person will feel satisfied

Utility is abstract concept there's no numerical utility possible

eg a thirsty person may derive higher or lower level of utility

Utility can be found either (0 or +ve) -ve utility is disutility

A Commodity can satisfy the want of more than one person & it can be also put to several uses eg electricity can be served to use many purpose & many people at same time

More intense the want, greater will be the utility eg a hungry person finds more utility in food then a persons who's not hungry

A person will demand a commodity only it gives utility to him

eg a sick person has utility in medicines so he will demand medicines

When utility is created due to change in the shape or structure of an existing material then it is called form utility

Eg Toys made of clay, Furniture made from wood

When utility of a commodity increase due to change in its place its called place utility

Eg wollen clothes have more utility at cold place then at warm place

Service Utility arises when personal services are provided by various professionals

Eg DR,Teacher,Lawyers

When a consumer acquires knowledge about a particular product it is called knowledge utility

Eg utility of mobile phone or computer increases when a person knows about its various functions

Arises when the ownership of goods is transformed one person to another

eg transform of goods from seller to buyer

When the utility of commodity increases with change in its time of utilization it is called time utility

Eg a student has more utility for textbooks during examination than in the vacations

Time Utility is also observed when goods are stored & stored at the time of scarcity eg blood bank

It is the aggregate of utility dereived by consumers from all units of commodity consumers

Refers to additional utility dereived by consumer from additional unit of commodity consumed

A Consumer is assumed to be rational that means that his behaviour is normal & he'll try to maximise his satisfaction

The utility can be numerically measured. Hence Mathematical opreations can be done to know & compare the utility derived from each unit of commodity

All units of a commodity are exactly identical in size shape colour & taste

All units of commodity are consumed in quick succestion without any lapse of time

All units of commodity consume are of reasonable size which means that they're neither too big too small

All the related factors like income,tastes,habits,choises,likes,dislikes of a consumer should remain constant. Marginal utility of money is also assumed to be constant

The law assumes that the commodity consumed by the consumer is divisible so that it can be acquired in small quantities

A given commodity can satisfy the single want of person the law assumes an experience of single want which is satibiable at given point of time

In certain hobbies like collection of stamps & coins rare paintings listening to music reading etc the law does not hold true bcoz every additional increase in stall gives more satisfaction

However this violates assumption of homogeniety & continuity

In the case of Miser every additional rupee gives him more & more satisfactions

However this situation

It is observed in the case of a drunk person the level of intoxication increases with every additional unit of liqour consume

However this violates the assumption of rationality

When a person acqiures power he desires to have more & more of it

However this violates rationality assumption

It is said that the marginal utility of money never becomes 0 this is bcoz money is medium of exchange which is used to satisfy various wants

However according to some economist this law appicable for money to eg marginal utility of money is more to poor person than to rich person

The law is based on various assumptions like homogenity, continity, constancy, rationality

In real life it is difficult to fullfill all these condition at a point of time

The Law assumes that utility can be expressed by adding, comparing & presenting through a schedule

In reality this measurment is not possible bcoz utility is pshychological concept

The law is not applicable to indivisble & bulky goods like refrigator,car & tv sets etc which are normally purchased in a single unit at a time

The law assumes that marginal utility of each unit of money remains constant

However a critics argue that marginal utility of money differs from person to person & is influenced by changes in prices, stock of money etc

The law is restricted to the satisfaction of a single want at a point of time

However in reality a man has to satisfy many wants a point of time

This law creates awarness among consumer

To obtain maximum utility from limited resources it is necessary to diversify consumption

The law helps the government in framing various policies such as progessive tax policy, trade policy, pricing policy

This law includes goods that have more value in use & zero or less value in exchange such as air water sunshine etc

It also includes goods that more value in exchange & less value in use such as gold diamonds etc

The law of demand is based on law of DMU

According to law of demand the quantity demanded of a good rises with the fall in price & falls with increase in price

When a consumer purchases more & more units of a good its marginal utility steadily declines

Hence he would buy additional units of commodity only at low cost price