A utility function measures a consumer’s preference and satisfaction with different goods or services. As part of rational choice theory, it helps economists analyze how consumers make decisions to ...

Learn how economists measure utility using cardinal and ordinal approaches to understand consumer choices and maximize satisfaction from products and services.

Sean Ross is a strategic adviser at 1031x.com, Investopedia contributor, and the founder and manager of Free Lances Ltd. Erika Rasure is globally-recognized as a leading consumer economics subject ...