Utility

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Utility has two primary meanings:

  • as a concept in economics (see below)
  • as a provider of electricity, gas or telephone service

Utility is an economic term representing someone's satisfaction or happiness. The utility of a good, for example, is the satisfaction it brings to a consumer.

Utility functions are mathematical ways of representing the benefits accruing to a consumer from his consumption of various goods. A utility function, in conjunction with a budget constraint, may be used to determine a consumer's optimal bundle of goods.

The term utility has its origins in utilitarianism, a philosophical school of thought in ethics.

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