Utility

Utility is a term with multiple meanings. In everyday language it denotes usefulness or value: the utility of a tool, or the advantages of a decision. In economics, utility is a theoretical measure of preferences and satisfaction.

In microeconomics, utility represents the satisfaction a consumer derives from goods and services. Total utility is the sum of satisfaction; marginal utility is the additional satisfaction from one more unit and typically diminishes. Most analyses assume ordinal utility, where only a ranking of preferences matters; cardinal utility attaches numerical values but is less central in modern theory.

Utility functions map bundles of goods to numbers representing the level of satisfaction. Consumer choice is explained by a budget constraint and indifference curves; utility maximization under the constraint yields demand. The framework extends to risk through expected utility theory.

Public utilities are essential services provided to the public, typically by regulated firms or government agencies. Examples include water, electricity, gas, and telecommunications. Utilities often involve natural monopolies, heavy infrastructure, price regulation, and universal service obligations.

In moral philosophy, utilitarianism evaluates actions by their consequences for overall well-being. Classical utilitarians include Jeremy Bentham and John Stuart Mill. Distinctions exist between act utilitarianism and rule utilitarianism.

In computing and software contexts, a utility is a program designed to perform a specific task, such as maintenance, data processing, or file management.