Economics · Consumer Behaviour and Demand

Which of the following statements regarding utility analysis is correct?

Verified Solution4 OptionsUpdated: October 2026👁️1 View

1A consumer usually decides his demand for a commodity solely on the basis of income.
2Ordinal utility analysis assumes that the level of utility can be expressed precisely in cardinal numbers.
3Average utility refers to the change in total utility due to the consumption of one additional unit of a commodity.
4Utility is a subjective concept and varies from person to person.✓

Correct answer

Utility is a subjective concept and varies from person to person.

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