Question

Identify the three kinds of utility and describe each one briefly.

Answer 1

• Utility reters to the capability of any good or service to satisfy human needs and wants.
• The three main types of utility are :-

1. Form utility.
2. Place utility.
3. Time utility.

1. Form utility :-

• Form utility refers to the utility obtained from the manufacturing of goods into various shapes or forms or colours that can satisfy human wants.
• For example :- when a rubber tree to cut down and the rubber extracted is used for manufacturing tyres.

2. Place utility :-

• Place utility refers to the utility created from transporting the goods from the manufacturing site to the destination or it can be defined as the utility created from transporting goods from one place to another.
• For example :- when toys manufactured in the manufacturing firms are shifted to toy market, then utility is created.

3. Time utility :-

• Time utility refers to the utility created from any good by being available at a particular time when a customer requires it.
• This utility can be achieved by storing, hoarding or preserving certain goods to create utility.
• For example :- ATM counters that remain in service for 24 hours everyday create utility for the customers.