utility

Utility

1. An economic term referring to the total satisfaction received from consuming a good or service.

2. A company that generates, transmits and/or distributes electricity, water and/or gas from facilities that it owns and/or operates.

Notes:

1. A consumer's utility is hard to measure. However, we can determine it indirectly with consumer behavior theories, which assume that consumers will strive to maximize their utility. Utility is a concept that was introduced by Daniel Bernoulli. He believed that for the usual person, utility increased with wealth but at a decreasing rate.

2. Since consumer demand for utilities does not change dramatically with a change in price, these companies are regulated by the state or provincial and federal governments.

See also: Behavioral Economics, Dismal Science, Dow Jones Utility Average - DJUA, Economics, Law of Diminishing Marginal Utility, Marginal Utility, Total Utility

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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

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