Explain utility and distinguish it from the physical form of a commodity.

### The concept Utility describes a commodity’s power to satisfy a need, want, or desire. It is not the same as physical tangibility. Food is a tangible good, while a haircut is a service; both may have utility if they satisfy what the consumer seeks. A product that a buyer does not value may provide little or no satisfaction to that buyer, even if it is physically present. Managers need to understand the utility consumers seek when deciding what to produce and offer. ### What a good answer covers - Define utility as satisfaction-producing ability. - Distinguish tangible goods from intangible services. - Explain that either goods or services can have utility. - Connect consumer utility to production decisions. ### Terms - **Tangible**: physical and able to be touched or held. - **Intangible**: not a physical object, as with many services. ### Remember Utility concerns what a commodity does for the consumer, not whether it is tangible.