Utility Study

2524 words 11 pages
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1.0: INTRODUCTION (UTILITY) Coca-Cola is an international brand that are consumed everyday all around the world. Statistic has shown that each day, more than 8 million can of Coca-Cola is being sold worldwide. However today we are not going to discuss about the secret behind Coca-Cola success. On the other hand we are going to move from production to consumer where discussion will be about the utility of Coca-Cola. Every customer has their own satisfaction level, and it is different with each other. Each item that we purchase, regardless if it is food, equipments, clothes, house, cars and phones has their own level of consumer satisfaction. This explains why some consumers are willing to purchase stuff that have almost the same …show more content…

Thus, with indifference curve, we decide that the second option is better when there are more apple in it compared to the other pack. The example shows he indifference curve that happened almost every day in our life.

GRAPH 2.3: Graph Shows the dot where Option A and option B for apples has been chosen.
3.0: DIFFERENCES BETWEEN CARDINAL AND ORDINAL UTILITY THEORIES What are the differences between cardinal and ordinal theories? The main differences between cardinal and ordinal theory can be explained by the valuation of satisfaction, the order mechanism, measurement of satisfaction, and

3.1: Valuation of Satisfaction (Utility)
Cardinal and ordinal utility have different type of valuation of satisfaction. As mentioned previously, Cardinal utility method used the unit util to evaluate the satisfaction of a person who are consuming a product or services. In cardinal utility method, quantitative method is used where numbers are being used as a way to compare how something can satisfy the consumer. For example, an Iphone can provide 500 util to a user, whereas a Samsung S4 can provide 450 util to a consumer, thus people will be more prompt to purchase iPhone instead of Samsung due to the high util that Iphone can provide. It is just as simple as that a person can actually use cardinal utility method to measure the satisfaction of purchasing an item. The continuation however, is based on the

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