Meaning of utility

Utility is the ability or power of a commodity to satisfy human wants..it is basically the satisfaction that consumer gets from consuming a good or some bundles of the good

We have two approaches to calculate utility

Cardinal approach - under this we assume that utility can be measured in numbers.

Ordinal approach - under this we assume that utility can't be measured but we can compare utility by giving ranks according to consumer preferences.

Utility is of two forms

Total utility - total satisfaction that consumer achieve by consuming some units of a commodity.

Marginal utility- is change in total utility when one additional unit of good is consumed,it is the utility from individual unit.

For mathematical formulas refer the video