Utility (redirected from Utility (economics))

Utility

A power company that owns or operates facilities used for the generation, transmission, or distribution of electric energy, which is regulated at state and federal levels.

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Utility

1. In economics, the level satisfaction the person derives from a good or service. Utility is inherently subjective and thus difficult to measure, but it is important in determining how much supply of a product the market can handle without diminishing demand. Historically, it has been thought that one can quantify the utility of each unit, but some economists disagree with this. See also: Austrian school, Law of Diminishing Marginal Utility.

2. A company that provides electricity, water, or gas to customers. These companies are subject to a number of regulations at the local and national levels. They borrow more than most other companies; thus, a decline in utility stocks is often seen as an indicator of a coming rise in interest rates. See also: Dow Jones Utility Average - DJUA.

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utility

A business that provides an essential service, generally under government regulation. Electric companies, gas transmission firms, and local telephone companies are utilities.