Utility means satisfaction which consumers derive from commodities and services by purchasing different units of money.
“Ineconomics, utility is a measure of satisfaction;it refers to the total satisfaction received by a consumer from consuming a good or service.
Utility is often affected by consumption of various goods and services, possession of wealth and spending of leisure time.s
CONSUMER BEHAVIOUR
• It is the study of how people buy, what they buy, when they buy and why they buy.
• It attempts to understand the buyer decision processes/buyer decision making process, both individually and in groups.
• It also tries to assess influences on the consumer from groups such as family, friends, reference groups, and society in general.
• The theory of consumer behavior in managerial economics depends on
a) Budget
• constrained by income and the price of the goods,
• The budget constraint specifies the combination of goods the consumer can afford to buy.
b) Preferences
• Economists use the concept of utility to describe preferences.
• There are some assumptions of consumer behavior theory like :-
a) rational behavior
b) clear cut preferences
• Consumer behaviour can be explained using two main approaches:
1. Marginal Utility Theory (The Cardinalist Approach); and
2. Indifference curve Analysis (The Ordinalist Approach)

1. MARGINAL UTILITY THEORY (THE CARDINALIST APPROACH)

• developed by Alfred Marshall who introduced an imaginary unit called the util as a means of measuring utility.
• 1 util = 1 unit of money.
• Utility is additive.
• This approach was termed cardinal since cardinal numbers could be used to measure utility.
• Each consumer chooses quantity demanded of all goods and services in order to maximize his/her utility or want satisfying power, given the limits imposed by available income.
• The concept of utility is